AT&T, sensing that the Comcast/Time Warner Cable merger might be an issue for its attempt to dominate the Internet market, has agreed to shell out $48.5 billion in cash and stock to acquire DirecTV. The merger will make AT&T the second-largest pay TV provider in the country, behind the Comcast/Time Warner behemoth.
The deal is actually worth $67.1 billion when you include DirecTV's debts, which AT&T will assume. DirecTV shareholders will receive $95 per share, "comprised of $28.50 per share in cash and $66.50 per share in AT&T stock."
Rumors that an AT&T/DirecTV deal was imminent began earlier this month, when the Wall Street Journal reported that AT&T had approached the satellite TV provider. The deal will give AT&T access to a much larger pay television consumer base than it had with its U-Verse program and give DirecTV's customers access to another internet provider, which may be a welcome change for some dissatisfied cable customers. Of course, it also means we've got another case of pay TV providers consolidating -- something they've done with increasing frequency over the last two decades -- which ultimately leaves fewer options for consumers.