AT&T's $48.5 billion acquisition of DirecTV to be approved by U.S. governmentBy Dieter Holger
Six anonymous sources have confirmed to Reuters that AT&T's $48.5 billion buyout of DirecTV is to be approved by the U.S. Justice Department and the FCC as soon as next week. AT&T will also take over all of DirecTV's debts, making the actual value of the deal over $67 billion.
AT&T has been in talks to buy DirecTV since at least 2014. Rumors started flying about the telecom giant's interest in the television provider in early May 2014 after a Wall Street Journal report. The telecom corporation formally announced their agreement to buy DirecTV on May 19, 2014.
AT&T's acquisition of DirecTV is a major step towards dominating the pay-TV business. Back in May 2014, AT&T CEO Randall Stephenson said that DirecTV was an attractive purchase for his company because of their growing business in Latin America and their content relationships. Additionally, DirecTV has about 20 million viewers and AT&T's U-Verse television service has only around 5.7 million. DirecTV also brings in a large chunk of cash every year, indicated by the company's revenue of $2.6 billion in 2013. Once the acquisition is complete, AT&T will become the largest pay-TV provider in the U.S.
Comcast sought a similar deal in February 2014 when they attempted to buy Time Warner Cable. The deal would have made Comcast the number one pay-TV provider, with the AT&T-DirecTV merger as a close second. But unlike AT&T, Comcast didn't acquire government approval for their proposed acquisition due to their's and Time Warner Cable's heavy presence in the broadband market.