Incumbent telco AT&T has made an approach to satellite-television provider DirecTV regarding an acquisition of the company that would cost at least US$40bn, according to The Wall Street Journal.
The move followed Comcast’s agreement to merge with…
Incumbent telco AT&T has made an approach to satellite-television provider DirecTV regarding an acquisition of the company that would cost at least US$40bn, according to The Wall Street Journal.
The move followed Comcast’s agreement to merge with fellow cable-TV giant Time Warner Cable (TWC) in February, and DirecTV would be open to a deal with AT&T, people familiar with the situation told the newspaper.
DirecTV shares have soared more than 6% on the back of the revelation. It is not the first time AT&T has held such discussions with satellite broadcasters – it has previously been reported to have held talks with 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 television where AT&T offers residential broadband and telephone services.
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 market to capitalise on the growing market for data services.
However, in March AT&T’s 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 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 companies were last reported to have held talks in late March following the Comcast/TWC deal.