AT&T is in "advanced talks" to purchase DirecTV for $100 a share, according to a report from Bloomberg News. DirecTV is the second largest pay television operator in the U.S. with 20 million customers. Combined, the companies will have 26 million subscribers and would be positioned as a substantial rival to the recent Time Warner Cable/Comcast merger, which led to 30 million combined cable subscribers.
Rumors of the deal have been circulating since last week, at which time the Wall Street Journal predicted the deal would be worth at least $40 billion. DirecTV currently has a value of $45 billion. At $100 a share, the deal would be worth closer to $50 billion, or about a third of AT&T's worth. It would be a massive merger, and definitely a reaction to the Comcast news from this winter. It would also narrow the cable world even further, eliminating one more potential competitor by swallowing them whole.
Bloomberg reports that as the plan exists now, DirecTV management would continue to run the company. The deal will require a year long regulatory process. An anonymous source also tells Bloomberg that DirecTV Chief Executive Officer Mike White will likely retire after 2015, which is about when the deal will close.
This article is from the archive of our partner The Wire.