AT&T to buy DirecTV for $48.5 billion in mega acquisition
America’s second-largest wireless provider AT&T will buy the country’s largest satellite TV company for $48.5 billion, as well as assume the company’s net debt, giving the total transaction a value of $67.1 billion.
America’s oldest telecommunications company, and once the world’s largest, will now grow beyond the increasingly competitive mobile telecoms business and step into the TV industry. DirecTV has around 20 million customers that pay for its TV services, which will allow AT&N to sell cellular, landline, broadband, and TV bundle packages more effectively.
The Wall Street Journal reports that the acquisition will result in 26 million video customers, which will help them compete with the giant merger between Comcast and TimeWarner Cable, slated for February at a cost $45 billion.
"It gives us the parts to fulfill a vision we have had for a couple of years; that is the opportunity and the ability to take premium content and deliver premium content over multiple points for the customer, whether it be through a smartphone, through a tablet, or television or laptop," said AT&T CEO Randall Stephenson, speaking during a conference call.
DirecTV CEO Mike White will continue to manage the business out of the El Segundo, California headquarters.
AT&T will be able to add Latin America to its portfolio, as DirecTV has some 18 million customers throughout that region.
DirecTV will now be able to offer its customers broadband internet, a first for the company.
AT&T is offering $95 per DirecTV share in a combination of stock and cash, a 10 percent premium over Friday's closing price of $86.18, Reuters reports. The company will finance the cash portion ($28.50 per stock share) using funds at hand and by selling off some assets.
The deal still awaits approval from US regulators, and AT&T will sell about 8 percent of company stock in America Movil, worth an estimated $5 billion.
