3 Reasons AT&T Is Buying DirecTV

Apparently, mergers and acquisitions are en vogue among companies in the telecom and media space this spring, as a wave of deal-making has swept through the sector in the past several weeks such as AT&T's (NYSE: T  ) recently approved buyout of DirecTV (NASDAQ: DTV  ) .

The AT&T acquisition of DirecTV comes on the heels of other mega deals including the Comcast-Time Warner buyout. Word also has it that Sprint is preparing a deal for the resurgent T-Mobile as well, although DISH Network is also waiting in the wings if Sprint's bid fails. 

Some of these deals stand a better chance of gaining the requisite regulatory approval, although it appears few believe the AT&T bid for DirecTV will face undue scrutiny. So with that in mind, let's look at why AT&T wanted to buy DirecTV altogether.

We bundle, you save?
There are plenty of reasons that AT&T will be in a fundamentally stronger competitive position once it acquires DirecTV.

For starters, DirecTV helps AT&T remedy one of its most glaring product shortcomings: the lack of a sizable pay-TV offering that AT&T can help bundle with other services. Beyond that, DirecTV's higher growth Latin American TV business will provide AT&T with a valuable new growth driver. And lastly, the combined synergies between the two will enable AT&T to roll out additional savings-fueled services to other parts of the country.

In the video below, tech and telecom specialist Andrew Tonner looks at these three key reasons behind AT&T's bid for DirecTV in greater detail.

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You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple. 

 


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  • Report this Comment On May 22, 2014, at 11:09 PM, drax7 wrote:

    This merger seems a mistake.

    To justify it with Latin America is a total smoke screen. .

    It will never happen.

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