Following a week of rumors, AT&T is officially acquiring satellite television provider DirecTV.
Rumors have been circulating for some time that AT&T was looking to purchase DirecTV, and now the deal has been made official. The boards of both companies have approved the sale and it will see AT&T paying $95 a share in a mixture of cash and stock and will value the deal in the range of $50 billion. Regulators will still need to approve the deal, but should that happen DirecTV will act as a subsidiary of the company best known for its phone services.
AT&T currently serves 5.3 million television customers in 20 states, while DirecTV has 20 million customers nationwide and is the second biggest TV subscription service in the U.S. behind only Comcast. Between these numbers and the fact that DirecTV services millions of customers with its satellite Internet service (despite how slow it may be), regulators are sure to take a very close look at this deal. There is a chance that it could be halted, but so far analysts are predicting that it will indeed go through.
Speaking of the deal, Randall Stephenson, AT&T Chairman and CEO, 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 airplanes. At the same time, it creates immediate and long-term value for our shareholders.”
Details are sure to emerge over the coming days of how exactly everything will fall together, but this will make for an interesting change in the landscape of several industries. It will give the new combined company a lot more power when negotiating with television networks for carriage fees, and it will give AT&T a lot of access to potential new customers for its cellular phone services.
No word as of yet when the deal is set to close or when regulators will begin reviewing the deal, but we’ll be keeping a close eye on this story as it develops in the coming days.