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AT&T to buy DirecTV for $48.5 billion as cellular growth eases

19
May
2014

By Liana B. Baker, Soyoung Kim and Marina Lopes (Reuters) – ATT plans to pay $48.5 billion to buy DirecTV, the top U.S. satellite TV operator, in a bid for growth beyond an increasingly competitive cellular market. The deal, announced on Sunday, comes as Comcast Corp awaits regulatory approval of its $45 billion bid for Time Warner Cable Inc, a transaction that has the potential to transform the television landscape by creating a new cable and broadband Internet powerhouse. ATT said it is offering $95 per DirecTV share in a combination of stock and cash, a 10 percent premium over Fridays closing price of $86.18. The cash portion, $28.50 per share, will be financed by cash, asset sales, financing already lined up and other opportunistic debt market transactions. Analysts said the deal would help support ATTs dividend even as it confronts tougher competition from upstart T-Mobile USA and other cellular operators that have pressured its average revenue per user.

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