AT&T to Buy DirecTV for $48.5 Billion
May 18, 2014, 6:18 PM by Eric M. Zeman
AT&T has entered into an agreement to purchase DirecTV for about $48.5 billion in a cash and stock transaction. The acquisition is more about providing AT&T with the means to grow its subscription TV business than about expanding mobile services. The acquisition gives AT&T a nationwide pay-TV footprint, and DirecTV has some compelling sports exclusives that AT&T will be able to offer its customers. AT&T said it will expand plans to build out its wired, fiber broadband network to an additional 15 million rural locations within four years. AT&T committed to offering stand-alone broadband services that don't include video programming. AT&T said it will homogenize DirecTV pricing so all consumers will pay the same prices. AT&T committed to abide by the 2010 net neutrality rules proposed by the Federal Communications Commission (even though those rules were eventually struck down). Last, AT&T said this transaction will not impact its plan to bid up to $9 billion in spectrum auctions both later this year and in mid-2015. The transaction includes DirecTV's Latin American services, and AT&T will divest its shares of America Movile in order to facilitate the transaction on those regions. DirecTV's shareholders will receive about $95 per share, including $28.50 in cash and $66.50 in AT&T stock. AT&T intends to finance the transaction through a combination of cash, sale of non-core assets, financing, and debt sales. The acquisition was approved by both AT&T and DirecTV's boards of directors, but it is subject to shareholder votes and regulatory review. AT&T expects the deal to close in about 12 months.
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Comments
Wow this stinks
There We Have It.
We look at how they will finance this deal and it clearly shows how the smaller carriers could not compete on the financial level of buying power regardless of "parent companies" involvement. AT&T was always in control even after the break up.
Here it is people in black and white. You asked for it, you've got it. Welcome to the dystopian mega merge era where companies gain power and the consumers lose choice.
John B.
Capitalism got out of control in this country - and so did the influence and campaign donations.
If this deal goes through, AT&T will be the largest pay tv provider in the world.
John B.
While they'll be very large, Comcast is will still be larger.
