AT&T confirms plans to buy DirecTV in $48.5B deal
AT&T聽Inc. on Sunday agreed to buy DirecTV for $48.5 billion, or $95 per share, a move that gives telecommunications company a larger base of video subscribers and increases its ability to compete against Comcast and Time Warner Cable, which agreed to a merger in February.
AT&T's proposed combination, which is subject to government review, could improve its Internet service by pushing its existing U-verse TV subscribers into video-over-satellite service, and thereby free up bandwidth on its telecommunications network.
AT&T聽currently offers a high-speed Internet plan in a bundle with DirecTV television service. The acquisition would help it further reap the benefits of that alliance.
With 5.7 million U-verse TV customers and 20.3 million DirecTV customers in the U.S., the combined entity would serve 26 million. That would make it the second-largest pay TV operator behind a combined Comcast-Time Warner Cable, which would serve 30 million.
The companies expect the deal to close within 12 months. Under the terms agreed to Sunday, DirecTV shareholders will receive $28.50 per share in cash and $66.50 per share in聽AT&T聽stock. The total transaction value is $67.1 billion, including DirecTV's net debt.
鈥淭his is a unique opportunity that will redefine the video entertainment industry and create a company able to offer new bundles and deliver content to consumers across multiple screens 鈥� mobile devices, TVs, laptops, cars and even airplanes. At the same time, it creates immediate and long-term value for our shareholders,鈥澛燗T&T Chairman and CEO聽Randall Stephenson said in a statement Sunday. 鈥淒IRECTV is the best option for us because they have the premier brand in pay TV, the best content relationships, and a fast-growing Latin American business. DIRECTV is a great fit with AT&T and together we鈥檒l be able to enhance innovation and provide customers new competitive choices for what they want in mobile, video and broadband services. We look forward to welcoming DIRECTV鈥檚 talented people to the AT&T family.鈥�
The deal could face tough scrutiny from the Federal Communications Commission and antitrust regulators at the Department of Justice.
