AT&T Deal for DirecTV Gets Board Votes Sunday

Telecom & Wireless

Published: May 18, 2014 8:10 am

Last Updated: April 27, 2020 5:05 pm

When word got out in early May that AT&T Inc. (NYSE: T) was considering a buyout of DirecTV (NASDAQ: DTV), the satellite company’s stock was trading at around $75 to $78 a share. Shares closed on Friday at $86.18, after hitting an all-time of $89.46 a share earlier this month.

The word now is that AT&T will pay in the mid-$90-a-share range for DirecTV in a deal worth about $50 billion. According to The Wall Street Journal, the boards of directors of the two companies are meeting Sunday to approve the deal.

The merger company would claim about 26 million pay TV subscribers, second only to the 30 million subscribers that will belong to the company that will emerge from the currently pending acquisition by Comcast Corp. (NASDAQ: CMCSA) of Time Warner Cable Inc. (NYSE: TWC). DirecTV now has about 20 million subscribers, compared with AT&T’s TV subscriber base of around 5.7 million for its U-verse pay-TV service.

From the points of view of the four companies involved in these massive deals, the deals do make business sense. Regulators will not allow AT&T to buy another phone company, and all the cable and satellite companies are losing subscribers. By getting bigger-than-huge the surviving entities ensure their survival.

And there is virtually no chance that U.S. regulators will reject the mergers. Comcast has already sweet-talked its way to an acquisition of NBCUniversal, pledging not to be a bully for seven years. So far Comcast has behaved and the company will no doubt use its good behavior for the three years since it acquired NBC as evidence of its good heart and public spiritedness in its offer for Time Warner. AT&T will make the same pledges if it is allowed to acquire DirecTV.

In the end, only consumers will suffer from the lack of competition not just in the pay-TV business but in the over-the-top, streaming video business, which both Comcast and AT&T know is where future profits lurk. Two giant companies will not compete, they will accommodate one another in an industry where prices for consumers are rising at four times the rate of inflation. Get ready to open your wallets.

ALSO READ: America’s Most (and Least) Common Jobs

100 Million Americans Are Missing This Crucial Retirement Tool

The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.

Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.

A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.

Click here to learn how to get a quote in just a few minutes.