AT&T to Buy DirecTV for $48.5 Billion

AT&T formally agreed to buy DirecTV for about $48 billion, striking a merger that will further reshape how Americans pay for television and connect to the Internet.

Under the agreement’s terms, AT&T will pay $95 a share in stock and cash, roughly 10 percent above DirecTV’s closing stock price on May 16 and about 30 percent higher than where its shares were trading before word of a potential transaction began to emerge. Including the assumption of DirecTV’s debt, the deal is valued at about $67.1 billion. Existing DirecTV shareholders would own 15 percent to 16 percent of the combined company after closing, which is expected in a year’s time. By acquiring the country’s biggest satellite television operator, AT&T will help bolster its competitive position against Comcast. Though pay television is considered a mature market whose subscriber growth has slowed sharply in recent years, the business nonetheless generates billions of dollars in cash. Through the acquisition, AT&T will transform itself from a relatively small player in the sector to the second-biggest provider, coming in second only to Comcast. AT&T has about 5.7 million TV customers through its U-verse service, while the satellite TV operator has about 20.3 million customers in the United States.


AT&T to Buy DirecTV for $48.5 Billion AT&T to Acquire DIRECTV (AT&T press release) It’s official: AT&T will buy DirecTV for $48.5B (GigaOm) AT&T-DirecTV deal to further transform media and telecom landscape (LA Times)