AT&T Inc. (NYSE: T) plans to buy DirecTV for $48.5 billion to gain more than 38 million video subscribers in the United States and in Latin America. AT&T announced it will pay $95 for each share of DirecTV, with $28.50 coming in cash and the equivalent of $66.50 in stock. That valuation is 10 percent more than DirecTV’s closing price on May 16. When factoring in net debt, the deal values the largest U.S. satellite-TV company at $67.1 billion. Randall Stephenson, chief executive officer of AT&T since 2007, agreed to buy DirecTV after competitors Comcast Corp. (CMCSA) and Time Warner Cable Inc. (TWC) announced a merger of their own to spur communications industry consolidation. The purchase, once approved by U.S. regulators, would give AT&T a national satellite-TV provider to combine with its existing packages of wireless, phone and high-speed Internet service. Without DirecTV, AT&T’s home video offering would have remained regional. The acquisition also gives AT&T a chance to lure additional subscribers if it is able to retain DirecTV’s exclusive NFL Sunday Ticket, which gave the satellite TV provider the exclusive rights to sell a supplemental subscription to its customers. For football-loving fans, the chance to watch all of the NFL games was a key differentiator to subscribe to DirecTV rather than a rival pay-TV service.
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