at&t-DirecTV

AT&T closed its $49 billion acquisition to buy DirecTV on July 24th. This merger was in the pipeline for over a year which results in making AT&T the biggest pay TV provider in the U.S.  with more than 26 million users. The deal was closed by both boards on Sunday, after it was approved by the Federal Communications Commission. With the rise of wireless technology and online entertainment, the cable and satellite providers are adding new product options and generating more revenue per customer to gratify shareholders. AT&T had to make some concession in order to gain the federal approval, relevant to their broadband services and net neutrality.

According to the deal each shareholder will be paid $95. The net worth of the transaction is $67.1 billion, inclusive of DirecTV’s debt. According to the deal, if AT&T stock’s closing price is below $34.90 or 1.724, DirecTV shareholders will receive 1.905. And if their closing price is between $34.90-$38.58, the shareholders at DirecTV will receive AT&T’s stock between 1.724-1.905 shares, which sums up to $66.50.

The merged company will be capable of offering a ‘quadruple-play’ bundle which includes mobile and fixed-line phone service, high speed internet, and TV. The merged company will be the only provider in the whole country to offer this bundle. Other than gaining more customers through this bundle offer, the majority of DirecTV’s customers will shift to AT&Ts’ mobile services.

To get the job done, AT&T had to make some concessions for the FCC. One of the mandated conditions is that the company will provide 12.5 million users with its high-speed gigabit optic fiber. The company is expected to offer discounted broadband service to low-income houses and better quality broadband service to the libraries and schools. The benchmark set by FCC for the broadband speed is 25 mbps.

The deal enables AT&T to become the largest distributors of many mediums of entertainment across the country.

“We’ll now be able to meet consumers’ future entertainment preference, whether they want traditional TV service with premier programming, their favorite content on a mobile device, or video streamed over the Internet to any screen,” said AT&T CEO Randall Stephenson in a statement.

AT&T will be expanding their business throughout Latin America. Previously, DirecTV was the major service provider in Latin America. Latin America is a huge market base for them as 40% of the population is middle or lower class and has availed pay TV services.

This merger makes AT&T comparable with the television $45 billion giant Comcast which is making deals with Time Warner Cable for merger. This merger will make AT&T the largest entertainment distributor in the USA.

ABOUT THE AUTHOR
Bryan TropeanoBryan Tropeano is a senior producer and a regular reporter for NewsWatch.  He lives in Washington D.C. and loves all things Tech.

9 COMMENTS

  1. Sweet blog! I discovered it while surfing around on Yahoo News.
    Have you got any suggestions on how to get indexed in Yahoo News?
    I’ve been trying for some time but I never manage to arrive!
    Cheers

  2. Hi there great website! Does running a blog like this require a large amount
    of work? I have no expertise in coding but I was hoping to start my own blog in the near future.
    Anyways, if you have any recommendations or tips for new blog
    owners please share. I know this is off topic however I just had to
    ask. Many thanks!

  3. Oh my goodness! Impressive article dude! Thank you so much, However I am dealing
    with complications with your RSS. I don’t know exactly why I am just incapable of subscribe to it.

    Will there be anybody getting identical RSS issues?
    Anyone that knows the solution would you like to kindly respond?
    Thanx!!

  4. I have got been surfing online over three hours
    nowadays, yet I in no way found any attention-grabbing
    article like yours. It can be pretty worth sufficient in my opinion. Within my view, if all site
    owners and bloggers made just right content as you did, the net is going to be far more useful than in the past.

Comments are closed.