July 21st, 2015
Well, that was quick. Following this month’s rumors that AT&T was allegedly interested in — and close to — acquiring satellite provider DirecTV, new reports indicate that AT&T will officially be making the announcement of the acquisition on Sunday.
According to an unnamed source speaking to Buzzfeed, “the deal is done.” DirecTV CEO Mike White has allegedly already informed the company’s senior executives that the deal with AT&T has been worked out, and he’ll be allegedly be confirming that fact in some kind of an announcement on Sunday — before Wall Street opens on Monday, of course.
Naturally, neither AT&T nor DirecTV have offered up any comment about the rumors.
If the acquisition goes through sans issue, it would give AT&T and its seemingly paltry U-verse service a bit more footing against cable rival Comcast. The former currently enjoys roughly 5.7 million subscribers or so, whereas the latter is currently trying to convince federal regulators that its recent interest in acquiring Time-Warner Cable should pass antitrust scrutiny. AT&T will likely face similar inquiries over its intent to purchase DirecTV but, should the deal pass, AT&T will be able to add the satellite giant’s 20 million subscribers or so to its flock.
“If they approve one they have to approve both,” said industry analyst Jeff Kagan in an interview with the Christian Science Monitor. “It’s hard to know [AT&T’s] thinking on this. It could be a way to get their deal on the same wave of regulatory approval, or it could be a way to derail the Comcast merger.”
It’s expected that AT&T’s deal will be worth north of $50 billion — between $92 and $94 per share. To put that figure in context, Comcast’s merger with Time Warner has been valued at a $45.2-billion dollar transaction (all stock, we note).
It’s also been suggested that AT&T might try to unload its video services to satellite, thus freeing up its pipeline for faster Internet service for U-Verse (and possibly even video on-demand as well).
While some are likely to balk at the idea of huge companies competing for paid television and Internet simultaneously in various regions, the move could actually save subscribers a bit of money as fewer companies push to offer a greater number of services over a wider area.
“If we as consumers have the choice for either AT&T or Verizon or CenturyLink or Comcast or whatever in the same space, that will drive innovation, and drive prices down. There is a growing level of competition that there wasn’t 10 years ago,” Kagan said.
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