Hulu has bought back wireless carrier AT&T’s 9.5 percent stake in the US entertainment streaming service for US$1.43 billion, in a deal that values Hulu at US$15 billion, Reuters reports.
The sale of the AT&T stake will give Walt Disney Co, which holds a 60 percent stake in Hulu via a joint venture, more control of the video streaming platform.
Comcast Corp’s NBCUniversal has a 30 percent stake in Hulu. Based on the joint venture agreement, Disney and Comcast will decide how they want to allocate the shares bought from AT&T.
Hulu, which competes with Netflix and Amazon Prime Video, has more than 25 million subscribers.
Hulu’s total value has now risen from a reported US$5.8 billion in 2016, when Time Warner – now a part of AT&T – bought the stake.
Netflix at the time had a market capitalization of about US$41 billion. Based on Monday’s stock market closing price, Netflix is valued at US$152 billion.
It is unclear how the deal could affect content on Hulu in the immediate future, Reuters said, as it noted that AT&T is preparing to launch its own subscription streaming video service.
“WarnerMedia will remain a valued partner to Hulu for years to come as we offer customers the best of TV, live and on demand, all in one place,” Hulu CEO Randy Freer said in a statement.
AT&T said it will use the proceeds from the Hulu stake sale to reduce debt, which stood at US$176.5 billion at the end of 2018.
The company had said in November that it could consider selling its stake in Hulu and review its non-core assets in 2019.
Disney last week forecast Hulu’s subscribers to reach 40 million to 60 million by fiscal 2024, and that the company would become profitable in the United States by 2023 or 2024.
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