AT&T to acquire DirecTV for $48.5bn

 

AT&T has announced that it is buying DirecTV, America’s biggest satellite television provider, for $48.5bn.

AT&T will acquire DirecTV’s 20 million subscribers and will have a broadband network covering 70 million customer locations.

AT&T Chairman and Chief Executive, Randall Stephenson said: “This 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 – mobile devices, TVs, laptops, cars and even aeroplanes. 

“DirectTV 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."

DirectTV President and Chief Executive, Mike White said: “This compelling and complementary combination will bring significant benefits to all consumers, shareholders and DirecTV employees.

“US consumers will have access to a more competitive bundle; shareholders will benefit from the enhanced value of the combined company; and employees will have the advantage of being part of a stronger, more competitive company, well positioned to meet the evolving video and broadband needs of the 21st century marketplace.”

The deal will give DirectTV the ability to package phone and internet service the way that cable companies already do.

AT&T already runs a television service called U-Verse, but its customer base is tiny in comparison to DirectTV.

“Together, the companies will be a stronger competitive alternative to cable for consumers wanting a better bundle of top-quality broadband, video and mobile services, as well as a better customer experience and enhanced innovation”, said the news release.

“Consumers will also benefit from the combined companies’ additional scale in video content distribution across its mobile, video and broadband networks. The combined company will continue to provide the world-class service and best video and entertainment experience for which DirectTV is known.”

AT&T will acquire DirectTV in a stock-and-cash transaction for $95 per share based on AT&T’s Friday closing price.

If both the AT&T-DirecTV and Comcast-Time Warner Cable deals go through, AT&T and Comcast would together control close to two-thirds of the US pay-TV market.

 Laura Bracher, London

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