AT&T acquires DirecTV in $49B deal

(USA Today) -- AT&T says it's buying DirecTV for $95 per share, or $49 billion, a move that gives the telecommunications company a larger base of video subscribers and increases its ability to compete against Comcast and Time Warner Cable.

AT&T has been in talks to buy DirecTV for a price pegged at "low to mid $90s" per DirecTV share, which would value DirecTV at about $50 billion, USA TODAY and other news outlets reported earlier this week.

AT&T offers pay-TV service through its U-Verse brand, but its market reach is limited. The acquisition of DirecTV, if completed and approved, would broaden AT&T's footprint nationally and create a pay-TV giant that can offer video through both fiber-optics lines and satellites. It would also give AT&T more flexibility in bundling services, including its wireless data contracts and DirecTV's satellite-delivered Internet service.

AT&T U-Verse's TV service, has about 5.7 million customers in 22 states. DirecTV, with about 20 million customers nationwide, is the second largest pay-TV provider and the largest satellite TV company in the U.S.

It's the latest evidence of TV-industry consolidation that underscores the telecommunications companies' desire to amass customers. With streaming technology upending the industry, cable and satellite service providers want to add product options and boost their revenue per customers to keep shareholders satisfied.

Their negotiation follows a deal struck earlier this year by Comcast to buy Time Warner Cable for about $45 billion, a transaction that would merge the nation's two largest cable companies.

With consumer groups loudly opposing media industry consolidation, AT&T and DirecTV could face regulatory roadblocks. AT&T's acquisition of DirecTV would eliminate a competitor in AT&T U-Verse's markets.

DirecTV would continue to be based in El Segundo, California, following the merger.

The companies expect the deal to close within 12 months following a government review.

Contributing: Associated Press


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