AT&T nears DirecTV purchase in new jolt to TV landscape
By Soyoung Kim and Liana B. Baker
NEW YORK (Reuters) - AT&T is close to announcing that it will buy the No. 1 U.S. satellite TV operator DirecTV, according to people familiar with the matter, in the second potentially transformative deal to jolt the U.S. television industry this year.
The No. 2 U.S. cellular operator, which also has some TV and broadband services, has been in active discussions to buy DirecTV for nearly $50 billion, or low to mid-$90s per share, and has been working to finalize a deal in coming weeks, Reuters reported last Monday.
The two companies agreed key terms of the proposed transaction and are expected to announce the deal in days pending final approval from each company's board, one of the people said on Saturday, asking not to be named because the matter is not public.
The takeover would be the latest in a string of mega-acquisitions AT&T has considered. Those include an abortive bid for T-Mobile USA in 2011, as well as a potential takeover of Vodafone Plc, which receded as a possibility after Comcast Corp surprised the industry this year with a $45 billion bid for Time Warner Cable Inc.
A tie-up with DirecTV would expand AT&T's reach and allow it to bundle new services, offering certain customers one-stop shopping for the range of cellular, broadband, TV and fixed line phone services. DirecTV would also produce cash flows that could help support AT&T's dividend.
Goldman Sachs Group and Bank of America Merrill Lynch are advising DirecTV, while Lazard Ltd is advising AT&T, the people said.
A spokeswoman for AT&T declined to comment. A DirecTV spokesman did not immediately respond to a request for comment.
News of an imminent announcement was first reported by BuzzFeed, which said on Saturday that DirecTV Chief Executive Mike White told his senior executives a deal had been reached and would be announced on Sunday. Continued...