AT&T announces deal to acquire DirecTV

By: Matt McGovern Email
By: Matt McGovern Email
The deal is worth almost $50 billion.

AT&T told investors on Sunday that the DirecTV acquisition "provides numerous growth opportunities," in part by by increasing television revenues.

NEW YORK, NY (CNNMoney) - AT&T said Sunday that it had agreed to acquire America's biggest satellite television provider, DirecTV, in a deal worth almost $50 billion.

The boards of the two companies met on Sunday to approve the plan.

"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," Randall Stephenson, the chief executive of AT&T, said in a statement.

He described DirecTV as the "best option" for AT&T "because they have the premier brand in pay TV, the best content relationships, and a fast-growing Latin American business."

AT&T's existing television service, called U-verse, only has about 5 million subscribers. DirecTV has more than 20 million. Through the acquisition, AT&T will have a stronger hand in shaping the future of television distribution and consumption.

AT&T said as much in its news release about the deal: "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."

Observers have cited DirecTV's fount of free cash flow, $2.6 billion in 2013, as another one of the motivations for AT&T to make the acquisition.

AT&T told investors on Sunday that the DirecTV acquisition "provides numerous growth opportunities," in part by by increasing television revenues.

AT&T will pay $48.5 billion for DirecTV in both stock and cash. It will also assume DirecTV debts, meaning the overall value of the deal exceeds $67 billion.


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