Incumbent US telco AT&T has reportedly approached DirecTV about an acquisition of the satellite TV provider that would cost at least US$40bn.
According to The Wall Street Journal, which cited a person familiar with the situation, DirecTV would be open…
Incumbent US telco AT&T has reportedly approached DirecTV about an acquisition of the satellite TV provider that would cost at least US$40bn.
According to The Wall Street Journal, which cited a person familiar with the situation, DirecTV would be open to a deal with AT&T.
The approach follows Comcast’s agreement to merge with fellow cable TV giant Time Warner Cable (TWC) in February.
DirecTV shares have soared more than 6% on the back of the news.
It is not the first time AT&T has held such discussions with satellite broadcasters – the telco has previously been reported to have held talks with both DirecTV and its chief rival Dish Network.
AT&T and DirecTV already have a cross-marketing agreement across 22 states, whereby they offer a co-branded version of DirecTV’s services where AT&T provides residential broadband and telephone products.
For AT&T, a move into DTH broadcasting would mark a change in tack, given that the operator had been publicly considering a move into the European telecoms market to tap growing demand for data.
However, in March AT&T CEO Randall Stephenson and CFO John Stephens both said that the window to do a wireless deal in Europe may be closing.
Stephenson has also indicated that the Comcast/TWC tie-up had shifted him to focus on the US.
Vodafone, seen as being AT&T’s principal target in Europe, saw its stock price fall 2.6% today as investors digested the fact that the British operator may no longer be AT&T’s M&A priority.
DirecTV is the second-largest pay-TV provider in the US after Comcast and the largest DTH operator, ahead of rival Dish. A tie-up between DirecTV and Dish has been long-mooted but has been resisted by regulators to this point. The satellite firms were last reported to have held talks in late March following the Comcast/TWC deal.