AT&T Strikes Deal to Buy DirecTV For $48.5B

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AT&T said Sunday that it had agreed to acquire America’s biggest satellite television provider, DirecTV, for almost $50 billion.

If approved by regulators, the acquisition will give AT&T a stronger hand in shaping the future of television distribution and consumption.

AT&T-DirecTV would be the country’s No. 2 provider of television subscribers behind a combined Comcast-Time Warner Cable. Add it all up, and Comcast and AT&T would control more than half of the market for pay television.

“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 airplanes,” said AT&T CEO Randall Stephenson.

He described DirecTV as the “best option” for AT&T “because they have the premier brand in pay TV, the best content relationships, and a fast-growing Latin American business.”

AT&T’s existing television service, called U-verse, only has about 5 million subscribers. DirecTV has more than 20 million.
DirecTV also has the popular NFL Sunday Ticket package of out-of-market football games. AT&T hasn’t specified whether it has any specific plans for Sunday Ticket.

But the wireless company is eager to experiment with new forms of video distribution. Whether people want to sit back and watch live TV on a big screen, Netflix-style on a smartphone, or some other way that’s still being dreamed up, AT&T wants to have a stake in it.

If approved by regulators, the deal will continue a wave of consolidation in the television and telecommunications industries. Comcast, the nation’s biggest cable provider, is currently awaiting regulatory approval for its plan to merge with Time Warner Cable.

But some groups will surely try to block it. The public interest group Free Press, which has opposed the Comcast-Time Warner Cable combination, said Sunday that it opposed AT&T and DirecTV joining forces. The group’s chief executive, Craig Aaron, said the current cycle of “merger mania” is “about eliminating the last shred of competition in a communications sector that’s already dominated by too few players.”

Other skeptics of cable industry consolidation have said that there is little, if any, reason to expect lower prices for television as a result of the deals.

AT&T will pay $48.5 billion for DirecTV in both stock and cash.

Read the full story at cnnmoney.com

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