AT&T merges with DirecTV

The No. 2 U.S. wireless carrier AT&T Inc and the biggest satellite-TV provider DirecTV became the country's largest pay-TV company on Friday, completing their $48.5 billion merger after receiving final regulatory approval.

The newly expanded AT&T leapfrogs the biggest U.S. cable company Comcast Corp. The company said it will serve more than 26 million U.S. customers and more than 19 million in Latin America, making it the world's biggest pay-TV company.

After more than a year of review, the Federal Communications Commission finalized its vote to approve the deal with conditions, imposed for four years and enforced by an internal and an external compliance officers.

The requirements from the FCC, which ensures that deals are in the public interest, include protections for rival video and pledges to expand high-speed Internet services to schools, low-income Americans and other customers.

AT&T shares were up 1.1 percent at $34.29 and DirecTV shares were up 1.5 percent at $93.55 at the market close.

"We'll now be able to meet consumers' future entertainment preferences, whether they want traditional TV service with premier programming, their favorite content on a mobile device, or video streamed over the Internet to any screen," AT&T Chairman and CEO Randall Stephenson said in a statement.


As the U.S. wireless market reaches saturation, AT&T hopes to tap into DirecTV’s business and has been expanding its footprint in Mexico after buying the third and fourth largest wireless carriers in that country recently.

The success of the deal in passing regulatory muster is in sharp contrast to rival telecom mega-merger of Comcast and Time Warner Cable Inc, which was rejected in April largely over the combined companies' reach into the broadband market.


Video companies Netflix Inc and Dish Network Corp, traffic company Cogent Communications Holdings Inc and others had fought for the FCC to reject the $45 billion Comcast merger, but took a more lenient tack with AT&T.