AT&T agrees DirecTV takeover for USD 48.5 bln

Nieuws Video Verenigde Staten 19 MAY 2014
AT&T agrees DirecTV takeover for USD 48.5 bln

AT&T has agreed to acquire the satellite pay-TV provider DirecTV for USD 48.5 billion. The acquisition strengthens its TV offering in the US, adding over 20.2 million new customers to the 5.7 million U-verse TV customers at AT&T. It also gives AT&T access to new video content and the growth market of Latin America, where DirecTV has over 18 million customers. AT&T will pay USD 95 per share for DirecTV, including USD 28.50 per share in cash and USD 66.50 in AT&T stock. 

The deal values DirecTV's equity at USD 48.5 billion, while the total transaction is worth USD 67.1 billion including DirecTV's net debt. After the deal, DirecTV shareholders will own 14.5-15.8 percent of AT&T. AT&T intends to finance the cash portion of the transaction through a combination of cash on hand, sale of non-core assets, committed financing facilities and debt market transactions. 

To facilitate the regulatory approval process in Latin America, AT&T intends to sell its stake in America Movil, which competes against DirecTV on the pay-TV market in the region. AT&T's members on the America Movil board will step down immediately. 

AT&T expects the deal to add to its free cash flow per share and adjusted EPS within 12 months of closing. The companies also expect over USD 1.6 billion in annual cost synergies from the takeover within three years, driven in part by increased sales of TV services to AT&T's fixed and mobile customers. 

Categories:

Video,  Internet

Companies:

America Movil,  DirecTV

Countries:

Verenigde Staten

Tags:

Satellite, M&A buyouts & divestments

Related Articles

VERENIGDE STATEN 27 JUL 2015

AT&T completes acquisition of DirecTV

AT&T has completed its acquisition of DirecTV, following approval from the FCC. The acquisition of the satellite TV provider makes AT&T the largest pay-TV operator in the US with a total 19 million customers. The company will build off DirecTV's customer base to expand its broadband and telephony base, offering bundles of TV, broadband and mobile services. The deal also expands AT&T's growing presence in LatinAmerica with over 191 million DirecTV cstomers there. AT&T announced that John Stankey will be CEO

VERENIGDE STATEN 22 JUL 2015

FCC set to approve AT&T's DirecTV takeover with conditions

An order recommending the approval of AT&T's acquisition of DirecTV has been circulated to the FCC commissioners, said chairman Tom Wheeler. The proposed order outlines a number of conditions that will increase competition in the broadband marketplace. If approved by the commissioners, 12.5 million customer locations will have access to a competitive fibre connection. The additional rollout is around ten times the size of AT&T's current FttP deployment and increases the national residential fibre build by o

VERENIGDE STATEN 23 OCT 2014

AT&T lowers FY revenue outlook

AT&T has lowered its annual revenue growth outlook to 3-4 percent, from 5 percent previously. The company blamed the downgrade on divestments, such as its Connecticut wireline assets sold to Frontier, an exit from low-margin wireline wholesale businesses and fewer customer additions for AT&T Next, its handset upgrade programme. For the third quarter, the US operator posted revenues up 2.5 percent year-on-year to USD 33.0 billion. Operating profit fell to USD 5.4 billion from USD 6.2 billion a year ago, hurt

BRAZILIË 17 SEP 2014

Anatel to decide on AT&T-DirecTV merger this week

AT&T's proposed acquisition of DirecTV, the parent company of Sky Brasil, was approved by the Administrative Council for Economic Defense (Cade) in July, and telecom regulator Anatel should give the green light "in a few days", reports Teletime. The information came from the superintendent of competition of Anatel, Carlos Manuel Baigorri, who added that the issue is on the agenda for the 18 September board meeting. He believes that there will be no regulatory problems in Brazil, but the major problem will b

VERENIGDE STATEN 26 AUG 2014

DOJ set to clear AT&T buy of DirecTV - report

AT&T has agreed with regulators conditions for the clearance of its proposed takeover of pay-TV provider DirecTV, a source close to the process told The New York Post. AT&T worked out the plan with the Justice Department, according to the source. However, the report did not say what, if any, conditions the DOJ has placed on the merger. In May AT&T agreed to buy DirecTV for USD 48.5 billion. The Department of Justice is expected to clear the AT&T deal in October. The FCC still has not ruled on the merger. 

VERENIGDE STATEN 1 AUG 2014

DirecTV boosts sales 5% to USD 8.11 bln in Q2

DirecTV revenue grew 5 percent to USD 8.11 billion in the second quarter, primarily due to strong ARPU growth at DirecTV US and subscriber growth and DirecTV US and DirecTV Latin America (DTVLA) over the last twelve months. The increases were partially offset by a lower ARPU at DTVLA due to unfavourable exchange rates. OPBDA rose 3 percent to USD 2.15 billion in the quarter, while the OPBDA margin contracted to 26.6 percent, reflecting higher programming and subscriber acquisition costs at both divisions. O

VERENIGDE STATEN 24 JUL 2014

AT&T growth slows in Q2 on shift in mobile model

AT&T reported a drop in second-quarter earnings, to USD 3.5 billion or 68 cents a share, from USD 3.8 billion or 71 cents a share a year earlier. Revenues were up just 1.6 percent to USD 32.6 billion, and a rise in operating costs led to a drop in the operating margin to 17.2 percent from 19.1 a year earlier. AT&T still maintained its outlook for 5 percent revenue growth over the full year, as well as stable margins and low mid-single digit growth in EPS. It expects improved results later from mobile custom

BRAZILIË 22 JUL 2014

Brazilian regulator approves AT&T-DirecTV deal

Brazilian antitrust agency Cade has approved, without restrictions, AT&T's acquisition of DirecTV. In May, AT&T announced a deal to purchase DirecTV for USD 48.5 billion. In order to have the transaction approved by regulators in the countries where both companies have operations, AT&T agreed to sell its 8.3 percent stake in America Movil In Brazil, America Movil owns mobile telephony operator Claro, pay-TV and broadband provider NET and telecoms services provider Embratel. Meanwhile, DirecTV Latin A

LATIJNS-AMERIKA EN HET CARIBISCH GEBIED 30 JUN 2014

America Movil to buy back AT&T stake

America Movil said it has agreed to buy back AT&T's 8.27 percent stake in the company. Its shareholders Inmobiliaria Carso and Control Empresarial de Capitales will buy the shares from AT&T International for USD 5.57 billion. AT&T said it expects to realise a profit of 8-10 cents a share from the sale, depending on the final tax on the sale. AT&T said earlier it would exit the investment in order to secure regulatory approval for its proposed takeover of DirecTV. Americal Movil competes against DirecTV in s

MEXICO 24 JUN 2014

Mexico regulator wants say on DirecTV, AT&T merger

Mexico's Federal Telecommunications Institute (IFT) has ordered US companies AT&T and DirecTV not to proceed with their merger until they obtain approval from the Unit for Economic Competition of the regulator, reports El Universal. In May, AT&T announced an agreement to acquire all of DirecTV, paying USD 48 billion for the DirecTV operations in the US and Latin America. The companies expect to close the deal in about 12 months. In Mexico, DirecTV operates in partnership with Televisa Group through pay-TV o

PUERTO RICO 23 JUN 2014

DirecTV migrates Puerto Rican subscribers to US unit

DirecTV is in process to migrate its subscribers in Puerto Rico to the company's US subsidiary from its PanAmericana division, NextTV Latam reports. PanAmericana represents all of the company's Latin American operations except Brazil and Mexico. According to the report, the migration is expected to be fully completed during 2014. The migration will enable DirecTV's PanAmericana to obtain more capacity to offer more HD channels. DirecTV PanAmericana currently offers 19 HD chanells to its regional subscribers

VERENIGDE STATEN 16 JUN 2014

Senate to hold hearing on AT&T, DirecTV merger

The Senate Judiciary Committee is planning to hold a hearing on the proposed USD 49 billion merger of AT&T and DirecTV later in June, the panel announced on 12 June, reported The Hill. The Antitrust subcommittee and the House Judiciary Committee will both hold their hearings on the matter on the same day, 24 June, with the House panel holding its hearing in the morning, followed hours later by lawmakers in the Senate. 

VERENIGDE STATEN 12 JUN 2014

AT&T insists DirecTV deal needed to be competitive

AT&T has told regulators that its proposed takeover of DirecTV is the only way they can compete with cable operators Time Warner Cable and Comcast in the market for bundled video and broadband services, reports the Wall Street Journal. In a filing of its public-interest statement with regulators, AT&T said that consumers increasingly want a bundle of broadband, voice and video services at home, and stressed that neither AT&T nor DirecTV were currently capable of providing such bundles nationwide. The filing

VERENIGDE STATEN 10 JUN 2014

City of Winston-Salem selects AT&T for Gigabit network

AT&T has announced that the city of Winston-Salem, North Carolina has ratified an agreement with AT&T to bring internet access to residents and businesses. Under the agreement, AT&T will provide U-verse with GigaPower over a fibre network speeds up to 1 Gbps. 

WERELD 5 JUN 2014

AT&T selling bonds in euros to fund DirecTV deal - report

One day after selling USD 2 billion of notes, AT&T is marketing bonds in Europe to help the company finance its proposed USD 48.5 billion acquisition of DirecTV, reported Bloomberg. AT&T is issuing a total 2.1 billion euros (USD 2.9 billion) of securities maturing in ten years and twenty years, according to a person familiar with the sale. The company sold 30-year bonds to US investors on 3 June to yield about 4.8 percent, data compiled by Bloomberg show. 

Just In

16:42

SLT-Mobitel launches 5G network in Sri Lanka

16:19

Dialog Axiata launches 5G network, connects 1.5 million subscribers

15:56

UK govt to ban AI-enabled nudification apps to protect women, girls

15:42

3 UK launches last-minute Christmas sale

Commentary

13:56

Video market set for slower growth ahead

11:38

Netflix buys Warner Bros to deepen content catalogue

11:11

KPN's mixed performance in Q3 raises questions for strategy day

15:26

Stock markets breaking records but what happened to Odido's IPO plans?

Background

01:04

The week in telecom: Wi-Fi bolt-ons take off to boost broadband growth, video market works on consolidation

01:39

The week in telecom: Netflix wins bidding for Warner Bros, Apple poaches new execs, Samsung debuts trifold

13:51

Proximus vs. Telenet: Proximus performs better in Q3 while Telenet uses up cash

14:16

Proximus Domestic still struggling with low margins

Complete profile

Before downloading the whitepaper, we would like to ask you to complete your profile with company and position. After confirming you will receive the white paper.