AT&T has agreed to the terms of a transaction in which Central European Media Enterprises Ltd. (CME) will be acquired by an affiliate of the Czech investment firm PPF Group N.V. (PPF). CME, which has broadcast operations in Bulgaria, the Czech Republic, Romania, Slovakia and Slovenia, announced in early 2019 that it was conducting a review of strategic options, including a potential sale of part or all of the company.

Under terms of the agreement, AT&T will receive approximately $1.1 billion (€0.99bn) in cash at close and will also be relieved of a $575 million debt guarantee. The sale is consistent with AT&T’s plans to monetise non-strategic assets as it continues to pay down debt. Given the company’s confidence in reaching a net debt-to-adjusted EBITDA ratio in the 2.5x range by the end of this year, shareholders should expect that share buybacks will be in the mix in the fourth quarter of 2019, along with continued de-levering.

AT&T acquired its stake in CME with the acquisition of Time Warner, now WarnerMedia, in 2018. PPF’s acquisition of CME is expected to be completed during the second quarter of 2020, subject to the receipt of regulatory approvals and the satisfaction of customary closing conditions.

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