Mon, May 19, 2014 - Page 15 News List

AT&T says close to DirecTV takeover

MEGA DEAL:The AT&T acquisition estimated at US$50 billion is a sign that the company wants to ‘grow at home,’ and could reshape the US telecom industry

NY TIMES NEWS SERVICE , NEW YORK

AT&T is poised to announce its takeover of DirecTV Inc within days, people briefed on the matter said on Saturday, ushering in another sweeping transformation of the US telecommunications industry.

Though both sides are putting the finishing touches on an agreement, talks may still fall apart, these people said.

The proposed agreement still requires final approval from the boards of both companies.

If completed, the acquisition would be worth more than US$50 billion, people briefed on the matter had said previously.

AT&T has anticipated paying between US$92 and US$94 a share in stock and cash.

Representatives for AT&T and DirecTV declined to comment or were not immediately available for comment.

BuzzFeed earlier reported that a deal could be announced yesterday.

By buying DirecTV, the US’ biggest satellite TV operator, AT&T will make its biggest move in years to grow at home since its failed US$39 billion takeover bid for T-Mobile three years ago.

The deal is likely to invite scrutiny from US regulators at a time when they are already weighing Comcast’s US$45 billion bid for Time Warner Cable, another blockbuster transaction aimed at reshaping the telecommunications industry.

And SoftBank, the Japanese telecom company that controls Sprint, has made no secret of its desire to buy T-Mobile USA, further consolidating the sector.

Several officials at the US Federal Communications Commission have already signaled that they would oppose such a transaction, fearing that it would concentrate too much of the wireless industry in three companies.

Acquiring DirecTV would bolster AT&T’s relatively small television offerings, while potentially freeing up bandwidth for high-speed Internet access.

AT&T has about 5.7 million TV customers through its U-verse service, while the satellite TV operator has about 20.3 million customers in the US.

AT&T would also gain a valuable position in Latin America, where DirecTV has about 18 million subscribers.

Meanwhile, DirecTV would solve one of its most pressing problems: slowing growth of paid TV subscribers in the US.

While cable companies can make up for that issue by expanding their broadband Internet offerings, DirecTV has no such alternative.

Though AT&T had weighed an international expansion campaign over the past year — one that likely would have been anchored by an acquisition of Vodafone, the European telecom giant — it has since trained its sights on growth in the US.

AT&T had grown interested in DirecTV in recent months, with talks becoming more serious after Comcast unveiled its deal for Time Warner Cable.

A tie-up of the two companies had been in the works before.

AT&T had closed in on a deal for DirecTV years ago, only to back away after hearing negative reactions from several big shareholders.

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