AT&T Inc. agreed to sell a majority stake in its Yellow Pages directory division to Cerberus Capital Management LP for about $950 million as part of an effort to dispose of units that are holding back revenue growth.
AT&T will receive $750 million in cash and a $200 million note, according to a statement from the Dallas-based phone carrier today.
AT&T will keep a 47 percent stake in the business, which had about $3.3 billion in revenue in 2011.
The sale lets AT&T, which hung on to its Yellow Pages division as competitors fled the business, to reduce its exposure to a unit facing increasing competition from online rivals Google Inc. Groupon Inc. and Yelp Inc.
To boost sales, AT&T, the biggest U.S. phone company, is focusing on its mobile- phone business, where it trails Verizon Wireless.
Sales at the Yellow Pages business declined 16 percent last year, compared with revenue growth of about 2 percent for AT&T as a whole, as Bloomberg stated.
Chief Executive Officer Randall Stephenson said in January that the company was looking “to either divest or restructure low-performing and non-strategic assets.”
The company said it won’t change its earnings forecast or dividend plans as a result of the sale.
The advertising unit publishes about 1,200 Yellow Pages directories in 22 states.
AT&T recorded fourth-quarter costs of 48 cents a share to reduce the value of assets of its directory operations. The company’s net loss was $1.12 a share in the quarter.
