May 13 - The potential combination of AT&T and DirecTV would produce a behemoth that would rival the proposed Comcast-Time Warner Cable merger in total subscribers. Fred Katayama reports.
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Another mega media merger in the works. Sources say AT&T is in talks to buy DirecTV for nearly $50 billion. A combination of the second largest U.S. wireless operator with the largest satellite TV provider would yield 26 million subscribers, just under the 30 million that would be produced by the proposed merger between cable giants Comcast and Time Warner Cable. It would help AT&T rapidly expand its pay-TV business.
An AT&T-DirecTV marriage could have huge implications. RBC analyst Jonathan Atkin says it could delay regulators' approval of the Comcast-Time Warner deal.
And he says, "It could pave the way for other potential deals that we believe could see regulatory approval, such as DISH/T-Mobile or Verizon/DISH."
With satellite subscriber growth slowing, some investors had speculated that DirecTV would hook up with archrival Dish. Dish tried before to buy DirecTV, but its chairman Charlie Ergen says he wouldn't do it now at the current price.
DirecTV's stock has gotten much pricier, shooting up 12 percent since rumors of a deal with AT&T got out two weeks ago. It's up 26 percent this year. Atlantic Equities believes AT&T will get DirecTV for about $100 a share, so it hiked its price target to that level.
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