AT&T makes bet on video with $ 48.5 b DirecTV bid

Tuesday, 20 May 2014 00:00 - - {{hitsCtrl.values.hits}}

REUTERS: AT&T Inc plans to pay $ 48.5 billion to buy DirecTV, in the latest sign that the wireless industry and the US television market are set to converge as customers consume more video on their mobile devices. The deal, announced on Sunday, highlights AT&T’s pressing need for fresh avenues of growth beyond the maturing US cellular business, which has become increasingly competitive. The combination with DirecTV, the No. 1 US satellite TV provider with 20 million customers, would beef up Dallas-based AT&T’s packages of cellular, broadband, TV and fixed-line phone services.

For DirecTV, the deal will enable it to offer broadband Internet for the first time to its US customers, filling in a gap that had made the company vulnerable to cable rivals, which can provide Internet service through their networks. The transaction has a total value of $ 67.1 billion, including the assumption of DirecTV’s net debt. AT&T and DirecTV made their announcement just a few months after Comcast Corp offered $ 45 billion for Time Warner Cable Inc, a transaction that would create the leading US cable and broadband Internet powerhouse. The Comcast proposal is now awaiting regulatory approval.