updated 09:05 am EDT, Thu May 1, 2014
Combined company would be nearly the size of Comcast and Time Warner Cable
AT&T has reportedly contacted DirecTV about purchasing the satellite television provider, according to sources familiar with the matter. The deal, if ever pursued to completion, would generate a 26 million user-strong television network, rivaling the size of the combined Comcast and Time Warner Cable giant. A timetable for an offer is unknown.
The deal, according to the Wall Street Journal, would be worth at least $40 billion -- well less than AT&T's $185 billion market capitalization. AT&T would use the company's video delivery assets to grow what it sees as its future, and would bolster weaknesses in each other's offerings. The combined entity would have satellite, wireless, and wired offerings, giving consumers numerous options for bundle deals.
Any deal would face intense scrutiny from regulatory agencies, already dealing with the Comcast and Time Warner Cable prospective merger. A source close to the US Federal Communications Commission (FCC) believes that there is a decent chance of a deal being approved, as the regulatory board sees solo services such as video or voice as dying out, and the combined company would be an excellent foil to the Comcast-Time Warner merged entity.