AT&T to acquire DirecTV for $48.5 billion
Telecom giant AT&T has agreed to acquire satellite TV firm DirecTV in a stock-&-cash deal worth around $48.5 billion, or $95 per share.
The deal, which has already been approved by the boards of both AT&T and DirecTV, will fetch nearly 21 million DirecTV and 5.7 million U-verse TV subscribers to AT&T, enabling it to better compete with potential cable giant that would be created by Comcast Corp.'s proposed $45 billion acquisition of Time Warner Cable.
Speaking about the deal, AT&T Chairman and CEO Randall Stephenson said, "What it does is it gives us the pieces to fulfill a vision we've had for a couple of years - the ability to take premium content and deliver it across multiple points: your smartphone, tablet, television or laptop."
However, many consumer groups have condemned the deal, saying it would hurt competition. Delara Derakhshani, policy counsel for the lobbying arm of Consumer Reports magazine, described the deal as an "attempt at consolidation" in a marketplace, where people are already heavy prices.
AT&T directly competes with DirecTV in 22 states of the country. Therefore merger of the two companies will definitely reduce choice for consumers. Decline in competition may also prompt AT&T to hike rates in the future.
AT&T is currently the largest mobile service provider in the United States, with as many as 116 million active users.