AT&T interested in acquiring satellite broadcaster DirecTV
AT&T Inc. and DirecTV are in exploratory talks about a potential sale of the satellite broadcaster to the telecommunications giant.
The board of directors from both companies have been briefed on the potential deal, said a person with knowledge of the talks who requested anonymity because of the sensitive nature of the matter. The talks were described as preliminary, and no deal was certain.
Both companies have formed due diligence teams to review a potential sale, this person said. Legal units at both companies are also scrutinizing the hurdles they would face from lawmakers and regulators as well.
The talks were first reported by the Wall Street Journal.
A combination of DirecTV and telecommunications behemoth AT&T would create a pay-TV giant with almost 26 million customers in the U.S. DirecTV has more than 20 million subscribers and AT&T’s U-Verse has close to 6 million customers. DirecTV also has 17 million subscribers in Latin America.
The El Segundo satellite broadcaster has a market cap of about $40 billion, while AT&T’s is $185 billion.
The first approach was made by AT&T and it came after Comcast Corp. struck a deal to acquire Time Warner Cable Inc.
DirecTV has long been rumored as a potential merger candidate, most often with rival satellite broadcaster Dish Network. The two companies tried to merge more than a decade ago, but regulators would not approve the combination.
AT&T has also been mentioned as a potential suitor in the past. The two companies have a relationship in which AT&T broadband is bundled with DirecTV in many markets around the country.
A DirecTV spokesman declined to comment. An AT&T spokesman couldn’t immediately be reached for comment.
Follow Joe Flint on Twitter @JBFlint.
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