Texas residents may be interested to learn that AT&T and DirecTV have announced a merger. The boards of directors for each company approved the transaction on May 18. AT&T will pay $48.5 billion to acquire DirecTV. After accounting for debts held by DirecTV, the merger is thought to be worth $67.1 billion. It is believed that the merger will immediately boost AT&T's customer base and help the company to provide additional products and boost overall revenue.
Investors stand to benefit from the deal. AT&T announced that it would pay $95 per share to DirecTV's shareholders. A portion of that amount will be paid in cash, with the remainder provided in AT&T stock. Shares of DirecTV rose 12 percent after news of the talks spread at the end of April.
AT&T previously offered U-Verse to television customers, but the product serves only 5.7 million customers in 22 states. As the largest satellite provider in the country and the second largest pay-TV service, DirecTV gives AT&T the ability to offer pay-TV nationwide. In addition, DirecTV has approximately 18 million customers in Latin America, which allows AT&T to plunge into a quickly growing market. However, because U-Verse and DirecTV are competitors, the merger faces regulatory roadblocks. The company needs to show how the merger benefits the industry.
When one business would like to merge with another, an attorney may be able to help negotiate a buyout or review any suggested contracts to ensure that the client's interests are protected. With corporations, an attorney may also be able to help seek shareholder approval for a transaction where necessary. In industries that are regulated, an attorney may also be able to help seek approval from any regulatory body to ensure that the deal is allowed to proceed.
Source: USA Today, "AT&T buys DirecTV for $48.5 billion", Roger Yu, May 18, 2014