AT&T And DirecTV Acquisition Deal Inked For $48.5B
By Daniel Joseph Cruz | May 20, 2014 11:09 AM EST
AT&T has officially announced acquiring DirecTV for $48.5 billion on May 18. According to the two companies' joint statement recently released, the boards of both companies have finally agreed to the deal.
A DirecTV satellite dish is seen on a home in the mountains outside Golden, Colorado May 18, 2014. DirecTV, the No. 1 U.S. satellite TV operator, said on Sunday it has agreed to sell itself to AT&T for $48.5 billion in the second mega-deal to shake-up the U.S. television landscape this year.
Under the terms of agreement, AT&T will pay DirecTV shareholders $95 per share, which amounts to the total value of $48.5 billion. A total transaction value of $67.1 billion will come up, including DirecTV's existing debts.
"Customers will be able to get wireless, voice, data, TV and home security from the same company nationwide," says Roger Entner, an analyst at Recon Analytics. "It allows (AT&T) to grow the share of consumers' spending on telecom,"USA TODAY reported.
"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," Randall Stephenson, AT&T's chairman and CEO, said in the same report.
Stephenson expressed another deal maker for DirecTV is its fast-growing Latin American business. DirecTV has 18 million and growing subscribers in Latin America, and its middle class is a fast-growing customer base.
The company also has exclusive access to national Sports channels and broadcast, available on multiple devices.
AT&T's latest acquisition widens its reach and creates a giant pay-TV company that can offer video through satellite TV and multiple mobile devices.
AT&T is aware of U.S. federal regulators' critical inspection for its merger approval. AT&T and DirecTV listed several commitments after the deal closes. Some of the commitments the company plans on implementing are a guarantee of 6 Mbps broadband Internet speeds for customers. DirecTV's TV service will remain available at current prices for all customers and abide by net neutrality rules.
AT&T's broadband service will expand to 15 million residential areas where the company hasn't reached yet. The company will use fiber optic lines and radio links to deliver Internet in the far-away areas. The project will be completed in 4 years after the merger completely closes.
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