AT&T Inc. on Sunday agreed to buy satellite-TV provider DirecTV for $48.5 billion, or $95 per share, a move that gives telecommunications company a larger base of video subscribers and increases its ability to compete against rivals.
AT&T currently offers a high-speed Internet plan in a bundle with DirecTV television service. The acquisition would help it further reap the benefits of that alliance. AT&T could also use the deal to improve its Internet service by pushing its existing U-verse TV subscribers into DirecTV’s video-over-satellite service, freeing up bandwidth on its telecommunications network.
With 5.7 million U-verse TV customers and 20.3 million DirecTV customers in the U.S., the combined AT&T-DirecTV would serve 26 million. That would make it the second-largest pay TV operator behind a combined Comcast-Time Warner Cable, which would serve 30 million under a $45 billion merger proposed in February.
AT&T and DirecTV expect the deal to close within 12 months. Under the terms agreed to Sunday, DirecTV shareholders will receive $28.50 per share in cash and $66.50 per share in AT&T stock. The total transaction value is $67.1 billion, including DirecTV’s net debt.