AT&T to Buy DirecTV for $49 Billion

AT&T Building, Atlanta, Graphics Project
By  | 

DALLAS - AT&T announced Sunday it is buying DirecTV for $95 per share, or $49 billion, a move that gives the telecommunications company a larger base of video subscribers and increases its ability to compete against Comcast and Time Warner Cable, which agreed to a merger in February.

Dallas-based AT&T's proposed combination could improve its Internet service by pushing its existing U-verse TV subscribers into video over satellite service, and thereby free up bandwidth on its telecommunications network

AT&T is the second-largest wireless carrier in the United States, after Verizon. It currently offers a high-speed Internet plan in a bundle with DirecTV television service. The acquisition would help it further reap the benefits of that alliance.

Acquiring DirecTV would allow AT&T to obtain a much larger role in the pay TV market. According to the National Cable and Telecommunications Association, 85 percent of the country has pay TV. Even with all the talk of cord cutting and people taking to the Internet to stream videos, pay TV is a big industry.

DirecTV would continue to be based in El Segundo, California, following the merger.

The companies expect the deal to close within 12 months following a government review.

Posted by: Lindsay Sax