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AT&T announced on Sunday that it has acquired DirecTV for $48.5 billion in an attempt to jump into the pay-TV market. This is the latest mega media merger and will raise more questions about competition in the marketplace.
The deal is a stock-and-cash transaction worth $95 per share, based on AT&T’s closing price on Friday. It was unanimously approved by the companies’ Board of Directors.
It will bring in 20 million DirecTV customers in the U.S. and Latin America. DirecTV’s satellite services will now be available to AT&T’s 70 million customer locations.
“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,” Randall Stephenson, AT&T Chairman and CEO, said in a statement. He added that DirecTV will be 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.”
While AT&T does have its own pay-TV service, it is dwarfed by DirecTV and other competitors. The Washington Post notes that its U-Verse service has just 5.7 million subscribers.
This is the latest mega-deal in the industry, following Comcast’s $45.2 billion deal to purchase Time Warner Cable. That, like the new deal between AT&T and DirecTV, still has to be approved by federal regulators.
In an effort to make its deal more appealing to regulators, AT&T did announce that it will bring Internet access to 15 million rural homes within four years if its deal with DirecTV is approved. It also said it would commit to net neutrality.