AT&T Purchase Of DirecTV Continues Media Consolidation Trend

Deal

AT&T's announcement that it is purchasing DIRECTV for $48.5 billion ($67.1 million including assumption of debt) continues the consolidation on the video side of the communications industry, with the sale price surpassing the $45 billion that COMCAST is paying to take over TIME WARNER CABLE.

The move would add DIRECTV's 20.3 million subscribers to AT&T's 5.7 million cable customers through its U-VERSE service, making the combined operation the second-largest pay TV provider in AMERICA. It would also add DIRECTV's LATIN AMERICA operations to AT&T, which presently has a minority interest in a competing satellite service, AMÉRICA MÓVIL.

The deal involves paying $95 per DIRECTV share in cash and stock, a 10% premium over FRIDAY's closing price and 30% more than the stock was worth before the sale talks became public.  Existing shareholders will also retain 15-16% of the newly-merged operation; DIRECTV would remain based in EL SEGUNDO, CA as a subsidiary of AT&T.

The deal will require approval by regulators.

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