Financial News

  • 20 May 2014, 7:16

AT&T Plans To Buy DirecTV For $48.5bn

Telecoms giant AT&T plans to buy DirecTV for $48.5bn (28.8bn), a bid that highlights the convergence between video and mobile devices.

The combination with DirecTV, the No1 US satellite TV provider with 20 million customers, would beef up AT&T's packages of cellular, broadband, TV and fixed-line phone services.

AT&T is already the largest mobile service provider in America, serving 116 million customers.

The combined AT&T-DirecTV would serve 26 million - making it the second-largest pay TV operator.

Comcast-Time Warner Cable would be first, serving 30 million under a $45bn merger proposed in February.

"What it does is it gives us the pieces to fulfil a vision we've had for a couple of years - the ability to take premium content and deliver it across multiple points: your smartphone, tablet, television or laptop," AT&T's Chairman and CEO Randall Stephenson said.

However, there are potential anti-competitive hurdles to clear.

Unlike the cable company tie-up, the AT&T-DirecTV merger would effectively cut the number of video providers from four to three for about 25% of US households.

AT&T and DirecTV expect the deal to close within 12 months.

Under the terms announced Sunday, DirecTV shareholders will receive $28.50 (16.9) per share in cash and $66.50 (39.5) per share in AT&T stock.

The total transaction value is $67.1bn (39.9bn), including DirecTV's net debt.

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