The telecommunications giant will acquire the satellite TV provider.
AT&T and DirecTV have announced plans to merge. The $48.5 million deal has been approved by both companies' board of directors and will allow AT&T to buy the satellite service in a stock-and-cash transaction for $95 per share.
"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," said Randall Stephenson, AT&T Chairman and CEO. "DIRECTV is the best option for us because they have the premier brand in pay TV, the best content relationships, and a fast-growing Latin American business. DIRECTV is a great fit with AT&T and together we’ll be able to enhance innovation and provide customers new competitive choices for what they want in mobile, video and broadband services. We look forward to welcoming DIRECTV's talented people to the AT&T family."
The merger will allow both companies to combine their strengths, unifying DirecTV's impressive selection of programming and content delivery with AT&T's premier broadband and mobile networks. This will enable the combined company to meet evolving customer needs across mobile, video and broadband platforms, covering traditional satellite and streaming venues.
"This compelling and complementary combination will bring significant benefits to all consumers, shareholders and DIRECTV employees," said Mike White, president and CEO of DIRECTV. "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, well positioned to meet the evolving video and broadband needs of the 21st century marketplace."
The deal is expected to close within the next 12 months but is still subject to approval from DirecTV shareholders, the U.S. Federal Communications Commission, U.S. Department of Justice, a few U.S. states and some Latin American countries. Likewise, AT&T has a special out clause in their contract enabling them to terminate the deal if DirecTV fails to retain the rights to its NFL Sunday Ticket service beyond this season.