AT&T (NYSE:T)’s acquisition deal with DirecTV (NASDAQ:DTV) in its concluding stages
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AT&T (NYSE:T) is halfway through its deal with DirecTV (NASDAQ:DTV), to buy the latter for 48.5 billion. It is being said that the deal still has six months to it until it is completely finalized. Acquisition of DirecTV (NASDAQ:DTV) will enhance the company’s subscribers to 26 million in the United States, more than 22.5 million subscribers of Comcast’s. Comcast is dealing with Time Warner Cable and if the deal falls through, it’ll overshadow AT&T (NYSE:T)’s acquisition and its subscribers.
Both the deals are being reviewed because they will be having an influence over numerous households in U.S when it comes to the pay-TV market. AT&T (NYSE:T) is buying out DirecTV (NASDAQ:DTV) in both cash and stock price. AT&T (NYSE:T)’s proposition is 95 dollars per share, out of those 66.50 dollars will come from stock money. AT&T (NYSE:T)’s current stock price is below 34.90 dollars; if the stock price stands at closing, in between 34.90 to 38.58.
DirecTV (NASDAQ:DTV) will receive shares somewhere between 1.724 and 1.905 which will be worth 66.50 dollars in value. AT&T (NYSE:T) is trading at the lowest as far as the aforementioned band is concerned, in that case DirecTV (NASDAQ:DTV) would get less than the 95 dollar ticket price. Due to these mergers, the companies that’ll be suffering the most are media companies which sell content directly to pay-TV operators. Because minimized buyers would result in less leverage.
Media companies aren’t being cooperative with the requests of FCC; they are providing arguments for their own favor such as demanding that the carriage contracts for satellite providers should have limited visibility. FCC, as of now, has suspended its review clock for gathering more information. The mergers are unaffected by the stoppage of the review clock since it’ll be resumed this week anyway. There aren’t hurdles that’ll keep these deals from happening eventually.
DirecTV (NASDAQ:DTV) got rid of initial problems such as getting the majority vote from its shareholders in favor of the transaction and renewing its agreement with NFL to carry its Sunday Ticket Package. It’s being said that AT&T (NYSE:T) had the authority to cancel the deal altogether if DirecTV (NASDAQ:DTV) had failed to settle the deal with NFL. NFL took advantage of the eagerness showed by DirecTV (NASDAQ:DTV) and charged an extra 50 percent.
AT&T (NYSE:T)’s acquisition of DirecTV (NASDAQ:DTV)’s enormous Latin American operations have already been accepted in South America, courtesy the sale of AT&T (NYSE:T)’s 8.3 percent stake in America Movil. That helped the company get more money for the acquisition. Although, Mexico is one country for which AT&T (NYSE:T) is yet to get an approval. The deal between DirectTV and AT&T (NYSE:T) is ideal because both are highly ranked in their respective areas.
DirecTV (NASDAQ: DTV) is ranked second in pay-TV provider while AT&T (NYSE:T) is the second largest broadband internet provider. There’s absolutely no reason at all why the deal will be disrupted.