AT&T has approached DirecTV about takeover: WSJ

Thu May 1, 2014 7:38am EDT
 
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(Reuters) - AT&T Inc T.N has approached DirecTV DTV.O about a possible purchase of the satellite TV company, the Wall Street Journal reported, citing people familiar with the situation.

A deal would likely be worth at least $40 billion, DirecTV's current market capitalization, the newspaper said.

A combination of AT&T and DirecTV would create a pay TV network that could rival Comcast Corp CMCSA.O if it completes its purchase of Time Warner Cable Inc TWC.N.

DirectTV is the nation's second largest pay TV provider after Comcast and is followed by Dish Network DISH.O. However, it lags cable and phone companies in the broadband market.

Aggressive discounting to attract customers in a nearly saturated wireless market is taking a toll on carriers such as AT&T, forcing them to explore other areas for growth.

AT&T, the No. 2 U.S. mobile provider behind Verizon Communications Inc VZ.N, is expanding its broadband and video services.

AT&T has held talks with both Dish Network and DirecTV in recent years, people familiar with the matter told the Journal. (r.reuters.com/qad98v)

AT&T and DirecTV have an agreement through which the companies offer a co-branded version of DirecTV's satellite television service across the 22 states where AT&T offers residential broadband and voice service. (r.reuters.com/vyd98v)

DirecTV also sells AT&T's broadband services, including AT&T U-verse High Speed Internet to existing DirecTV customers.   Continued...

 
A Direct TV dish is seen outside a home in the Queens borough of New York July 29, 2013. REUTERS/Shannon Stapleton