AT&T has acquired DirecTV for $48.5 billion, making AT&T the second-largest TV provider in the United States.
The company's acquisition of DirecTV comprises of $48.5 billion in cash and stock, as well as the assumption of the satellite television provider's debts, bringing the total value of the buyout deal to $67.1 billion. Shareholders of DirecTV will be given $95 per share, "comprised of $28.50 per share in cash and $66.50 per share in AT&T stock."
AT&T's deal gives the firm a wider pay television audience -- approximately 26 million video subscribers combined -- and will rival cable companies through offering not only TV and video services, but also phone and broadband. AT&T already offers a phone, Internet and TV bundle through UVerse, but the service has failed to gain any real popularity.
By acquiring DirecTV, the company will be able to improve these bundles, and the consolidation also solves DirecTV's past problems as it lacked a partner for phone and Web services.
In a statement, AT&T's chairman and CEO Randall Stephenson commented:
"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."
However, the consolidation of the two companies will also cut away one more company and further limit consumer choice. Speaking to the Washington Post, John Bergmayer of consumer advocacy group Public Knowledge commented:
"The industry needs more competition, not more mergers. We'll have to analyze this one carefully for potential harms both to the video programming and the wireless markets."
If approved by regulatory bodies, the deal is expected to close within 12 months.
Read on: Wall Street Journal