AT&T said late on Sunday it agreed to buy pay-TV giant DirecTV for about $48.5 billion (£28.8 billion) in stock and cash as consolidation in the US media and communications markets continues at a fast pace – regulators permitting.
Comcast, America’s largest cable company, is currently seeking regulatory approval for its roughly $45 billion (£26.7 billion) deal to buy Time Warner Cable.
Analysts said an AT&T purchase of DirecTV would mean it would be less likely to pursue a deal to buy Vodafone to expand in Europe.
AT&T said it would acquire DirecTV for $95 (£56) per share based on AT&T’s Friday closing price and that the deal had been approved unanimously by the boards of both companies.
“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 chief executive.
“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.”
To help obtain regulatory approval for the DirecTV deal, AT&T intends to divest its interest in Latin American phone company América Móvil.
AT&T said the deal would position it better to meet consumers’ future viewing habits, whether on traditional pay TV, or via on-demand video services like Netflix or Hulu streamed on a broadband connection -- mobile or fixed.