It's official -- AT&T
has agreed to acquire DirecTV
, the largest satellite TV provider in the U.S. with 20 million customers, for approximately $48.5 billion. It's a stock-and-cash transaction deal worth $95 per share based on AT&T 's Friday closing price, which represents a 10 percent premium. DirecTV shareholders will receive $28.50 per share in cash and $66.50 per share in AT&T stock.
That equates to an equity value of $48.5 billion, and a total transaction value of $67.1 billion, including DirecTV's net debt. AT&T plans to finance the cash portion of the deal through a combination of cash on hand, sale of non-core assets, committed financing facilities, and opportunistic debt market transactions.
Following regulatory approval, AT&T will use the transaction to bundle video, high-speed broadband, and mobile services. This has already been taking place in select areas where the two companies have partnered up to offer their combined services to consumers.
"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 – mobile devices, TVs, laptops, cars and even airplanes. At the same time, it creates immediate and long-term value for our shareholders," said Randall Stephenson , AT&T Chairman and CEO. "DirecTV is the best option for us because they have the premier brand in pay TV, the best content relationships, and a fast-growing Latin American business."
DirecTV is particularly strong when it comes to sports. It's the only service provider to offer NFL Sunday Ticket, which provides every out-of-market game on every Sunday during football season, and it also offers a number of other sports packages, such as NBA League Pass.