Confirming weeks of rumors, AT&T officially announced today it will be acquiring satellite TV provider DirecTV. The deal itself will cost $48.5 billion and AT&T will pay DirecTV shareholders about $95 a share using a combination of cash and AT&T stock.
AT&T's press release states:
The combined company will be a content distribution leader across mobile, video and broadband platforms. This distribution scale will position the company to better meet consumers’ future viewing and programming preferences, whether traditional pay TV, on-demand video services like Netflix or Hulu streamed over a broadband connection (mobile or fixed) or a combination of viewing preferences on any screen.
AT&T claims the deal will allow the company to expand broadband Internet access to 15 million more people who are located mostly in rural areas where high-speed service is currently not available. DirecTV will continue to be offered as a stand alone service for at least three years after the merger is completed.
The company expects to close the deal sometime within the next 12 months, which means that it could be well into 2015 before the acquisition is official. Of course, this buyout can and will be examined by regulators in the U.S. and other countries, and there will certainly be questions asked if this deal violates any anti-trust laws.
AT&T previously tried to purchase wireless carrier T-Mobile a few years ago but later decided to call off the acquisition in 2011 due to pressure from the FCC and the U.S. Department of Justice.
Source: AT&T | Image via AT&T