Bloomberg reports that AT&T is now in advanced talks to buy DirecTV for about $50 billion as media merger fever picks up.

Alan Breznick, Cable/Video Practice Leader, Light Reading

May 13, 2014

2 Min Read
AT&T Closing on DirecTV?

Determined not to be dwarfed by the prospective union of Comcast and Time Warner Cable, AT&T appears close to buying satellite TV king DirecTV for about $50 billion, according to a Bloomberg report.

Bloomberg cites people familiar with the matter who say that AT&T Inc. (NYSE: T) is now in advanced talks with DirecTV Group Inc. (NYSE: DTV) about the deal. Under the plan being discussed, Bloomberg says, DirecTV management would continue to run the satellite service as a unit of AT&T. In addition, current DirecTV CEO Mike White would retire after 2015.

If the deal is actually sealed, it would create a huge phone/satellite/broadband monolith in the Americas, particularly in the US. In the pay-TV market alone, the new company would have more than 43 million video subscribers, including about 26 million in the US and the rest in Central and South America.

AT&T would also be scooping DirecTV out of the clutches of number two satellite TV player Dish Network LLC (Nasdaq: DISH), which has long craved to merge with DirecTV. Dish Chairman and Co-Founder Charlie Ergen has had his eye on DirecTV for years. (See Dish CEO: DirecTV Merger Possible.)

Of course, any deal struck by the two companies would be subject to big-time regulatory scrutiny by both the Antitrust Division of the U.S. Department of Justice and Federal Communications Commission (FCC) , which are already gearing up to consider the proposed acquisition of Time Warner Cable Inc. (NYSE: TWC) by Comcast Corp. (Nasdaq: CMCSA, CMCSK).

DirecTV's stock was buoyed by the M&A chatter, surging $5.29 (or about 6%) to $92.45 in after-hours trading on Monday evening. AT&T's share price dipped 6 cents to $36.51.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

About the Author(s)

Alan Breznick

Cable/Video Practice Leader, Light Reading

Alan Breznick is a business editor and research analyst who has tracked the cable, broadband and video markets like an over-bred bloodhound for more than 20 years.

As a senior analyst at Light Reading's research arm, Heavy Reading, for six years, Alan authored numerous reports, columns, white papers and case studies, moderated dozens of webinars, and organized and hosted more than 15 -- count 'em --regional conferences on cable, broadband and IPTV technology topics. And all this while maintaining a summer job as an ostrich wrangler.

Before that, he was the founding editor of Light Reading Cable, transforming a monthly newsletter into a daily website. Prior to joining Light Reading, Alan was a broadband analyst for Kinetic Strategies and a contributing analyst for One Touch Intelligence.

He is based in the Toronto area, though is New York born and bred. Just ask, and he will take you on a power-walking tour of Manhattan, pointing out the tourist hotspots and the places that make up his personal timeline: The bench where he smoked his first pipe; the alley where he won his first fist fight. That kind of thing.

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