Report: AT&T approached DirecTV about buyout

05/01/2014 10:33 AM

05/01/2014 10:01 PM

Dallas-based AT&T and DirecTV are in exploratory talks about a potential sale of the satellite broadcaster to the telecommunications giant.

The discussions are preliminary, and a deal isn’t certain, said a person with knowledge of the talks who requested anonymity because of the sensitive nature of the matter.

Both companies have formed due-diligence teams to review a potential sale, the person said. Legal units at both are also scrutinizing the hurdles they would face from lawmakers and regulators. The talks were first reported by The Wall Street Journal.

A combination of DirecTV and AT&T would create a pay-TV giant with almost 26 million U.S. customers. DirecTV has more than 20 million subscribers, and AT&T’s U-Verse has close to 6 million. DirecTV also has 17 million subscribers in Latin America.

The El Segundo, Calif., satellite broadcaster has a market capitalization of about $40 billion, while AT&T has $185 billion.

AT&T made the first move after Comcast Corp. struck a deal to acquire Time Warner Cable.

DirecTV has long been rumored as a potential merger candidate, most often with rival Dish Network. The companies tried to merge more than a decade ago, but regulators would not approve the combination.

AT&T has 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.

A DirecTV spokesman declined to comment. An AT&T spokesman couldn’t be reached for comment.

Any proposed acquisition would probably be reviewed by the Justice Department and be subject to approval by the Federal Communications Commission, the Journal said.

Join the Discussion

Fort Worth Star-Telegram is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQ | Terms of Service