Hulu has paid $1.43 billion to buy AT&T’s minority stake in the streaming video company.
The companies announced Monday that the transaction valued Hulu at $15 billion. As a result, AT&T’s 9.5 percent stake in Hulu was worth $1.43 billion.
The valuation is two-thirds higher than last November when Disney reported in a regulatory filing that the streaming video company was worth $9.26 billion. Hulu is owned by Hulu LLC, a joint venture of Disney and Comcast. Disney now has a 67 percent ownership of Hulu, which it gained, in part, through its $71 billion acquisition of 21st Century Fox. Comcast has a 33 percent stake in Hulu.
AT&T, which has been hinting about selling its minority stake in Hulu since November, will use proceeds from this transaction, along with additional planned sales of non-core assets, to reduce its debt.
“We thank AT&T for their support and investment over the past two years and look forward to collaboration in the future. 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 statement.
AT&T acquired the 9.5 percent percent stake in the service by way of WarnerMedia, as a result of its Time Warner acquisition.
AT&T and Hulu were increasingly looking like competitors, not partners. AT&T has its own streaming services, including cord cutter-friendly live TV service DirecTV Now, more lightweight WatchTV and another upcoming direct-to-consumer service that will launch later this year that leverages its WarnerMedia properties.
This new AT&T streaming service, which will work across devices, will launch into beta in Q4 2019, AT&T has said. The service is expected to expand over time to include third-party content through partnerships.