AT&T Announces DirecTV Acquisition

On Sunday, May 18, 2014, AT&T announced that they would be purchasing satellite television operator DirecTV for $48.5 billion.  This purchase will be the second largest television industry acquisition for the year, next to the Comcast-Time Warner Cable merger.

"It gives us the parts to fulfill a vision we have had for a couple of years, that is, the opportunity and the ability to take premium content and deliver premium content over multiple points for the customer, whether it be through a smartphone, through a tablet, or television or laptop," said AT&T CEO Randall L. Stephenson.

Dallas-based AT&T will be picking up access to DirecTV’s 20.3 million subscribers, in addition to the 5.7 million U-Verse customers that it currently has – which would make it the second biggest pay TV provider in the United States.

The deal should also grow AT&T’s footprint in Latin America, as well as assist them with entering other markets, including airplane technology.

"U.S. consumers will have access to a more competitive bundle; shareholders will benefit from the enhanced value of the combined company; and employees will have the advantage of being part of a stronger, more competitive company," said DirecTV CEO Mike White, who will remain with the business in its El Segundo, California, headquarters.

Industry experts are already championing the agreement.

“It's a counterpunch to Comcast-Time Warner Cable,” said Paul Gallant, an analyst at Guggenheim Securities. “I expect they’ll find a way to differentiate against Comcast by melding pay TV with their wireless service.”

According to Recon Analytics analyst Roger Entner, "Customers will be able to get wireless, voice, data, TV and home security from the same company nationwide."

For additional information, see the official press release.

Author: Brian Cameron

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