SAO PAULO, Brazil — Galaxy Latin America (GLA), the DirecTV service provider in Latin America, has agreed to purchase 100% of Galaxy Brasil, the exclusive distributor of DirecTV in Brazil, from Brazilian operator TVA.
GLA also announced its two remaining partners — Hughes Electronics and Venezuela’s Cisneros Group — will purchase TVA’s 10% stake in GLA.
The two transactions must be approved by TVA’s bond holders, while the Galaxy Brasil deal will be submitted to Brazil’s communications regulating agency Anatel.
Officials did not disclose figures, but a market analyst said TVA will receive a total of about $270 million from the sale of the two assets.
Due to the agreement, Leila Loria, CEO of Galaxy Brasil, has left the company and will be named superintendent director of TVA.
Debt-strangled TVA, which belongs to the Abril group, one of the largest publishers in Brazil, has been negotiating the sale of its shares in GLA and Galaxy Brasil since October.
TVA is the second partner to leave GLA. Mexico’s Multivision, one of the founders of GLA, has sold its 10% stake in the consortium.
Following the approval of the deal with TVA, Hughes will hold 77.8% of the shares in GLA, while Cisneros will have a 22.2% stake. Previous to the deal, Hughes had 70% of the shares, while Cisneros owned 20% and TVA 10%.
In Brazil, DirecTV is in fierce competition with Netsat’s Sky, owned by Brazil media giant Globo, News Corp., TCI and local RBS.
Sky has an estimated 320,000 subs, DirecTV some 260,000.
TVA’s departure is seen as a positive development for Galaxy Brasil. TVA had been more concerned with its microwave delivery systems and cable operations, and Galaxy lacked operational independence.
“DirecTV is losing the subscriber battle to Sky, even though it has better programming and a more sophisticated pay-per-view system. The management of Galaxy Brasil is just not aggressive enough in promoting their product,” a market analyst said.