In the biggest technology deal of the year so far, US telecommunications giant ATT has bought broadcast satellite service provider DirecTV for nearly $50bn (£29bn).
DirecTV was recently listed as the second largest media owner in the world (behind Google) and the deal gives AT&T access to DirecTV’s 40 million digital TV customers in the US and Latin America.
The merger would create a major rival to cable TV giant Comcast, which hopes to expand its coverage with the pending takeover of Time Warner Cable.
DirecTV has about 20 million customers, making it the No.2 pay-TV company in the US. It also has more than 18 million customers in Latin America.
ATT said it would use the merger to expand plans to build and enhance high-speed broadband service to 15 million customer locations, mostly in rural areas.
‘This is a unique opportunity that will redefine the video entertainment industry and create a company able to offer new bundles and deliver content to consumers across multiple screens,’ ATT chairman and chief executive Randall Stephenson said in a statement.
DirecTV president and CEO Mike White said: ‘US consumers will have access to a more competitive bundle, shareholders will benefit from the enhanced value of the combined company and employees will have the advantage of being part of a stronger, more competitive company.’
As part of the deal, shareholders will receive $US95 per share under the terms of the merger, including $US28.50 per share in cash and $US66.50 per share in ATT stock, the companies announced on Sunday.
A statement said the transaction, approved unanimously by both boards, is based on a total equity value of $US48.5 billion ($A52.47 billion) and a total transaction value of $US67.1 billion, including DirecTV’s net debt.
But the deal is subject to approval by DirecTV shareholders, and needs to be reviewed by US regulators, including the Federal Communications Commission and the Department of Justice.
Both companies are hopeful the transaction will complete in about 12 months.