AT&T plans to buy DirecTV in a deal worth US$49 billion to expand its presence in the entertainment market. Once completed, AT&T will be the second largest TV content provider behind Comcast-Time Warner.
AT&T buys more of the TV market in $49B DirecTV deal
The proposed deal was approved unanimously by both company's boards. AT&T CEO Randal Stephenson said, "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&T already has a presence in the television market with its U-Verse service, although its subscriber base is substantially lower than DirectTV. Once the deal is completed, AT&T said it will be able to offer broadband Internet service to 15 million more customers, and has committed to offering broadband-only deals for customers that aren't interested in TV channel packages.
The company also said it will follow the FCC's open Internet protection rules from 2010 for three years regardless of what Net Neutrality changes come from diluted proposal presented by FCC chairman Tom Wheeler.
AT&T will pay for part of the deal with its own stock valued at $95 based on last Friday's closing price. The remainder of the $49 billion will be paid in cash.
The deal must still work its way through the usual Federal review process. AT&T said it expects to complete the DirecTV purchase within 12 months.