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http://news.directv.com/2014/05/18/d...press-release/

AT&T to Acquire DIRECTV

May 18, 2014 04:56 PM Eastern Daylight Time

DALLAS & EL SEGUNDO, Calif.–(BUSINESS WIRE)–AT&T (NYSE:T) and DIRECTV (NASDAQTV) today announced that they have entered into a definitive agreement under which AT&T will acquire DIRECTV in a stock-and-cash transaction for $95 per share based on AT&T’s Friday closing price. The agreement has been approved unanimously by the Boards of Directors of both companies.

The transaction combines complementary strengths to create a unique new competitor with unprecedented capabilities in mobility, video and broadband services.

DIRECTV is the premier pay TV provider in the United States and Latin America, with a high-quality customer base, the best selection of programming, the best technology for delivering and viewing high-quality video on any device and the best customer satisfaction among major U.S. cable and satellite TV providers. AT&T has a best-in-class nationwide mobile network and a high-speed broadband network that will cover 70 million customer locations with the broadband expansion enabled by this transaction.

The combined company will be a content distribution leader across mobile, video and broadband platforms. This distribution scale will position the company to better meet consumers’ future viewing and programming preferences, whether traditional pay TV, on-demand video services like Netflix or Hulu streamed over a broadband connection (mobile or fixed) or a combination of viewing preferences on any screen.

The transaction enables the combined company to offer consumers bundles that include video, high-speed broadband and mobile services using all of its sales channels — AT&T’s 2,300 retail stores and thousands of authorized dealers and agents of both companies nationwide.

“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 a great fit with AT&T and together we’ll be able to enhance innovation and provide customers new competitive choices for what they want in mobile, video and broadband services. We look forward to welcoming DIRECTV’s talented people to the AT&T family.”

“This compelling and complementary combination will bring significant benefits to all consumers, shareholders and DIRECTV employees,” said Mike White, president and CEO of DIRECTV. “U.S. 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, well positioned to meet the evolving video and broadband needs of the 21st century marketplace.”

DIRECTV has premier content, particularly live sports programming. It has the exclusive pay TV rights to NFL SUNDAY TICKET that provides every out-of-market game, every Sunday afternoon, on TV, laptops and mobile devices. The new AT&T will be better positioned to develop unique content offerings for consumers through, among other initiatives, AT&T’s joint venture with The Chernin Group. Today, DIRECTV’s content ownership includes ROOT SPORTS Networks and minority stakes in the Game Show Network, MLB Network, NHL Network and the Sundance Channel.

DIRECTV will continue to be headquartered in El Segundo, California, after the deal closes.

Customer Benefits and Commitments, Upon Closing

Together, the companies will be a stronger competitive alternative to cable for consumers wanting a better bundle of top-quality broadband, video and mobile services, as well as a better customer experience and enhanced innovation. Consumers will also benefit from the combined companies’ additional scale in video content distribution across its mobile, video and broadband networks. The combined company will continue to provide the world-class service and best video and entertainment experience for which DIRECTV is known.

With the benefits of the transaction, AT&T is able to commit to do the following, when the deal closes:

• 15 Million Customer Locations Get More High Speed Broadband Competition. AT&T will use the merger synergies to expand its plans to build and enhance high-speed broadband service to 15 million customer locations, mostly in rural areas where AT&T does not provide high-speed broadband service today, utilizing a combination of technologies including fiber to the premises and fixed wireless local loop capabilities. This new commitment, to be completed within four years after close, is on top of the fiber and Project VIP broadband expansion plans AT&T has already announced. Customers will be able to buy broadband service stand-alone or as part of a bundle with other AT&T services.

• Stand-Alone Broadband. For customers who only want a broadband service and may choose to consume video through an over-the-top (OTT) service like Netflix or Hulu, the combined company will offer stand-alone wireline broadband service at speeds of at least 6 Mbps (where feasible) in areas where AT&T offers wireline IP broadband service today at guaranteed prices for three years after closing.

• Nationwide Package Pricing on DIRECTV. DIRECTV’s TV service will continue to be available on a stand-alone basis at nationwide package prices that are the same for all customers, no matter where they live, for at least three years after closing.

• Net Neutrality Commitment. Continued commitment for three years after closing to the FCC’s Open Internet protections established in 2010, irrespective of whether the FCC re-establishes such protections for other industry participants following the DC Circuit Court of Appeals vacating those rules.

• Spectrum Auction. The transaction does not alter AT&T’s plans to meaningfully participate in the FCC’s planned spectrum auctions later this year and in 2015. AT&T intends to bid at least $9 billion in connection with the 2015 incentive auction provided there is sufficient spectrum available in the auction to provide AT&T a viable path to at least a 2×10 MHz nationwide spectrum footprint.

Ranger

As long as those fuckers don't touch T-Mobile.

Interesting to see what happens. What about ATT Uverse? ATT won't expand that service?

collven

What does this have to do with T-Mobile? They already tried that and got shot down, remember? Plus, T-Mobile is doing a lot better now than they were when AT&T tried to buy them. Don't think T-Mobile would be interested any more.

johnnysd

Gotta think this transaction will be shot done. Would be horrible for consumers. More and more sometimes I think the future as shown in Continuum is not that far off.

TheKing

With DirecTV or not, they don't want to expand Uverse. Both AT&T and Version want out of the wired business. That's why FIOS isn't expanding, and Verizon does whatever it can to get out of fixing their old copper networks.

Honestly with the way things are going, this deal could kill both companies. More and more people are cord cutting every year, and spending this much for a business model that is nearing its twilight years is probably not the best move.

But, it could help to keep some costs down, like from all these channels and networks that keep gouging us all for their content. Not that the consumers would see the benefit!

dvd-4-life

DirecTV prices are outrageous. I recently dropped all the (premium)movie channels(SD) from DirecTV and saved 40 bucks,then just the other day upgraded Charter to Silver and received all the HBO's,Showtime's and Cinemax's(all in HD and SD),146 channels overall,for just 20 bucks.

If it wasn't for Regional Sports Networks and NFL Sunday Ticket,I would drop DirecTV .

DVD Josh

No, this will be approve relatively easily.

slop101

Ugh. We need more, smaller media companies, NOT less, larger ones.

The Cow

Hmm, I wonder if this will make it harder to get the NFL Sunday ticket/RedZone for free or heavily discounted. I'm guessing yes.

fujishig

Seems like the deal is contingent on the Sunday Ticket deal continuing on past the current terms below some maximum agreed-upon (between AT&T and DTV) rate.

DJariya

AT&T gets the NFL network edition of Red Zone. I wonder how that might play into this.

I just upgraded to the Genie last month for free, so I have a new 2 year contract with Directv. So I'm stuck with them awhile. I am loving the Genie though.

It says this deal still needs approval and is expected to close within the next year. Hopefully this won't take away the ability to haggle for credits.

PhantomStranger

This will get approved but it will end up costing consumers in the end. A coherent argument could be made that former Telcos in the U.S. are seriously retarding free-market capitalism. I foresee a world where we'll end up having to pay hundreds per month for unfettered Internet access.

Canis Firebrand

Isn't Comcast already toying with that with the reported stories that Comcast is going to limit the amount of data customers can use each month. Meaning that if customers want higher limits or go over, Comcast is going to charge them probably quite a bit more. These companies are enjoying a monopoly because realistically customers have usually one choice of cable and internet providers in any given city. I don't see how these deals for telecom companies to buy each other are approved.

Red Dog

I really don't know what is in this for AT&T, unless it's specifically going for the Latin American DTV interests. They talk about bundling, but I don't see how that works. I have DTV, but would have no way to bundle AT&T internet with it as I can't bundle now (have to go with either FIOS or Comcrap for that), so unless they can build out their fiber optics (which seems highly unlikely), what's the point - it would only help them in their U-Verse areas, where they already bundle.

That's my fear. I like DTV's customer service and willingness to negotiate. I can't imagine AT&T will offer the same level of service.

Arthur Dent

They'll bundle standard DSL in areas in which they're the/a telecommunications provider.

Red Dog

I guess that would work for some, but I would think we're moving away from DSL.

DJariya

AT&T's DSL is horrible, plus they have data caps as well. One of the reasons why I dropped AT&T and got Time Warner for Internet. There were certain times during the day and even in the evening hours where streaming would lag big time.

Shannon Nutt

Yes, but they're not doing it for at least 5 years and they're setting the limit at 350GB. They'll charge $10 for every extra 50GB after that. As someone who more or less 'lives' on the Net and never uses more than 50GB per month, I find it hard to believe there are people out there going over 350GB...unless they just spend all day every day downloading HD movies.

Red Dog

How much data is binging a full season of a show in HD on Netflix?

flashburn

Fucking ridiculous. I'm sure it'll get approved too. Next thing we know Comcast will be buying AT&T.

ddrknghtrtns

Really don't know why they are doing this. These mega-mergers hardly ever pan out like they plan.

Canis Firebrand

Ahh.. I hadn't heard the actual limits.. just that they were going to implement them. 350 gigs a month should be more than enough, I would imagine, for all but those that download movies, tv, and music via torrents and other methods. I imagine they'd start with putting in a system to let customers monitor their monthly usage to show that the vast majority aren't using anywhere near the limit. That would make it easier to swallow.. I think people naturally don't like when they are told there is a limit on something.

ChrisHicks

Comcast has a bandwidth monitor but I've seen many people complain that's it's not accurate. I've been pretty lucky in that regard as it's always been within a GB or two of what my router reports.



That's my last few months of usage which includes Netflix streaming in HD and downloading various PSN games. Last month I finally downloaded a bunch of the larger games which accounts for the spike. I have no idea when the cap is actually coming back in play for my area(currently suspended) so I've been trying to get more of them downloaded before that happens because I really don't need to pay Comcast any more money that I already do(currently $260.00+ for cable and internet).

Now I can see how 350GB will not be enough for a family of 4 but for a single person maybe(for now anyway). I've had Comcast for years with the 250GB cap in play so I got accustomed to just limiting my downloads on a monthly basis just to be sure I never got those "you're using too much data!!" letters where they threaten to cut your service. It's not ideal that you can't just download everything you want whenever you want but there is no other option besides Comcast for me so I have to monitor.

mnementh

350 GB/mo limits consumers to crappy overly compressed video. An hour of 1080i HDTV over cable tends to be 4GB. An hour of over-the-air HDTV tends to be 6.5 GB. Sports broadcasts tend to have a higher bitrate. The bandwidth caps prevent consumers from being able to purchase Blu-ray quality downloads or rentals from iTunes and Netflix. The situation's going to get worse once 4K UHD video becomes more common.

Drexl

They don't offer Blu-ray-quality downloads anyway.