US incumbent AT&T and satellite TV provider DirecTV have extended the termination date for their planned US$48.5bn merger. AT&T said in a short SEC filing that both parties agreed the merger agreement, dated 18 May 2014, should be further extended…
US incumbent AT&T and satellite TV provider DirecTV have extended the termination date for their planned US$48.5bn merger.
AT&T said in a short SEC filing that both parties agreed the merger agreement, dated 18 May 2014, should be further extended “for a short period of time to facilitate obtaining final regulatory approval…”
AT&T added that it expects the deal to close “shortly”.
The parties had originally expected to complete the deal within 12 months, however AT&T first filed for an extension in May this year. At the time, the telco also said it expected the deal to close shortly.
Analysts are generally optimistic that regulators the FCC and Department of Justice will approve the deal, albeit with conditions. AT&T is expected to accept the FCC’s new net neutrality rules to win clearance, despite being among the industry players to have filed a lawsuit challenging them.
New Street Research analyst Jonathan Chaplin said he believes the government is poised to clear the deal. While some reports have predicted this could take place as soon as this week, Chaplin said next week or the following one looks more likely, noting possible delays around the Fourth of July holiday.
“We had thought that the holiday could be an action-enforcing event, causing all sides to work over this weekend to finalise the approval but … we think the odds favour the week of the 13th or 20th.”
Chaplin said that as far as his team could tell, the DoJ has already signed off on the transaction.
At the FCC, discussions centred around a small number of conditions to do with issues such as net neutrality, interconnection and low-income access, he said.
Cableco Charter’s recent filing in support of its planned Time Warner Cable (TWC) merger, in which it agreed to abide by the FCC’s new net neutrality rules, is likely to have given the commission extra leverage in these talks, Chapman said.
Last month, Dish Network, Cogent Communications and consumer advocacy groups met with FCC officials to discuss conditions for the AT&T-DirecTV merger. Their preferred conditions include requiring AT&T to offer customers standalone broadband access at reasonable speeds and prices, and not forcing them to buy bundled packages.
They have expressed concerns that the merger would give AT&T greater incentive to favour its own video services for the benefit of bundle customers, and also to thwart competing OTT services.
