AT&T acquires DirecTV for US$67bn to create next-generation telecoms giant

19 May 2014

The largest telecoms operator in the US AT&T has acquired satellite TV brand DirecTV for US$67bn, or US$95 per share. The move makes AT&T a multi-screen TV and video-content distributor across 70m customer locations.

The rationale for the deal is DirecTV’s satellite technology is a strong competitive alternative to cable and it gives AT&T a reach that extends beyond large cities.

Another trigger for the deal has been Comcast’s acquisition of Time Warner Cable in February.

AT&T also emphasised its commitment to net neutrality in targeting a telecoms world that straddles mobility, video and broadband services.

DirecTV, which has 20m paying customers in the US, is the largest pay TV provider in the US and Latin America.

The move enables AT&T to take on new streaming players, such as Netflix and Hulu, as well as offer bundles that include video, high-speed broadband and mobile services.

“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,” said Randall Stephenson, AT&T chairman and CEO.

“At the same time, it creates immediate and long-term value for our shareholders. DirecTV is the best option for us because they have the premier brand in pay TV, the best content relationships, and a fast-growing Latin-American business.

“DirecTV is 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. We look forward to welcoming DirectTV talented people to the AT&T family,” Stephenson said.

AT&T image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years