Communications Giant, AT&T has announced its has entered into agreement with DirecTV, to acquire the American direct broadcast satellite service provide for $48.5 Billion.
The deal would see DirecTV offer broadband internet to its US customers for the first time, filling a void which has made the company vulnerable to rivals who provides internet services through their networks.
With AT&T acquiring DirecTV, it would be able to provide wireless phone and high speed broadband service to 70 million customer location. DirecTV also has exclusive rights to the NFL Sunday ticket programming, a massively watched programme. This means all exclusive DirecTV programs would be available for AT&T customers as well.
With rival Comcast proposing to acquire Time Warner Cable Inc for $45 billion, AT&T has swung into action with the acqusition of DirecTV. The deal involving AT&T and DirecTV would be a stock and cash transaction, which see AT&T will pay $95 per share for DirecTV and $28.50 per share in cash, with the rest sorted out in stock. The total cos of the transaction would amount to a total value of $67.1 Billion including DirecTV net debt.
The deal is however still subject to approval by regulators, if DirecTV agrees another deal with another corporation with higher bid it will pay $1.4 million breakup fee with AT&T, while AT&T would not have to pay any penalty of regulators dismiss the bid.
The implication of this massive acquisition means AT&T would achieve both television broadcast and mobile phone prominence. The deal is subject to approval by the Federal Communications commission and US Department of Justice with the deal expected tobe completed in about 12 months.
[Image credits: Kake.com]
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