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: Quote) 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: Quote) 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: Quote). 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: Quote), 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