market will settle into a telecom oligopoly with Verizon, AT&T and T-Mobile (NASDAQ:TMUS), with a rational pricing structure which should be great for all three. Management needs very different skill sets for the two businesses. It is a clear signal that media and pipes are two different business and do not offer synergy. Verizon (NYSE:VZ) also recently sold off its media (Yahoo and AOL) to private equity. Overall, I think this transaction will be a net positive for AT&T and will refocus the telecom giant as well as cut its debt, which has become a big concern for investors. It expects the ratio of net debt to adjusted Ebitda to come down to 2.6, ideally reaching below 2.5 by end of 2023. The $43 billion obtained from the split-off will go to net debt reduction at close.
#VERIZON SYSTEM STAMP TNT FULL#
The combined company intends to use free cash flow to reduce leverage from five times at the closing of the deal to three times within 24 months.ĪT&T will use the money obtained from the transaction to deleverage immediately and then focus on 5G wireless and optical fibre roll-out, coming full circle and becoming a pure telecom again. It also expects $15+ billion of DTC (streaming) revenues in 2023 and cost savings of $3 billion. The combined company projects it will produce ~$52 billion in revenue and ~$14 billion in adjusted Ebitda in 2023. It will have media brands like CNN, HBO Max, March Madness, TLC, HGTV, Animal Planet, TNT and many others. It will focus on content, not transmission or technology. The new company (which has yet to be officially named) will become the third-largest media company behind Disney (NYSE:DIS) and Netflix (NASDAQ:NFLX). AT&T Retreats, Providing an Opportunity for Investors
0 kommentar(er)
