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.

Your cable company is scared, but you can get rich
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. 


Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • 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.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2968781, ~/Articles/ArticleHandler.aspx, 3/29/2015 9:12:07 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...