AT&T Talks DirecTV Acquisition: ‘We Feel Quite Good About Our Prospects’

By Josh Long Comments
Posted in News, AT&T, M&A, Financial
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**Editor's Note: Please click here for a recap of the biggest communications mergers in Q1 2014.**

AT&T executives are confident regulators will approve its $49 billion acquisition of DirecTV.

In a conference call with financial analysts last week, AT&T Chairman and CEO Randall Stephenson said the company thoroughly examined the regulatory implications of the deal and determined it could pass scrutiny.

“It is our belief and our conviction a deal can be designed in a way that is consumer-friendly and serves the public interests," Stephenson said, according to a transcript of the May 19 conference call that AT&T filed with the Securities and Exchange Commission.

AT&T and DirecTV “are not each other’s closest competitors by any stretch of the imagination," added Wayne Watts, senior executive vice president and general counsel for AT&T, during the call.

For example, DirecTV isn’t able to bundle its video service with other offerings while AT&T does, but in a limited geography, Watts said.

“Our primary competitor[s] from that standpoint are the cable companies," he said. “So we have that complementarity … and we do not have that close competition. You put those two things together and we feel quite good about our prospects."

The two largest cable companies in the United States have made similar arguments to the FCC that they do not compete against each other. Comcast and Time Warner Cable in February announced plans to merge.

Critics of both deals worry the combined companies will be too big, depriving consumers of adequate choices and resulting in higher prices. Antitrust officials with the U.S. Justice Department will examine the potential impacts of the mergers on consumer choice, competition and cost.

The AT&T-DirecTV agreement is valued at $49 billion, excluding $19 billion in debt AT&T would assume from DirecTV.

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