ATTsmallNews came in late Sunday that AT&T has agreed to purchase satellite TV provider DirecTV for a reported $48.5 billion dollars. Both company’s boards approved the deal on Sunday afternoon.

AT&T will pay DirecTV shareholders $95 per share with $28.50 being in cash and the other $66.50 per share worth of AT&T stock ” In the stock portion of the deal, they will receive 1.905 AT&T shares if AT&T stock price is below $34.90 at closing or 1.724 AT&T shares if its stock price is above $38.58. If AT&T’s stock price at closing is between $34.90 and $38.58, DirecTV shareholders will receive between 1.724 and 1.905 shares of AT&T stock, equal to $66.50 in value.” USA Today reported. 

AT&T and DirecTV will hold a joint press conference on Monday morning to co-announce the merger and the effects it will have for both share holders and customers of both companies. In order to smooth over potential regulatory hurdles AT&T made several commitments:

  • Broadband expansion, AT&T will expand their internet services to 15 million more residential customers, mostly across rural areas. They will use a combination of fiber optic lines directly to homes and direct radio link to deliver the internet in the “last mile” between the home and the local exchange, a technology that other internet providers have used over the last two years. This expansion will be completed within 4 years of the proposed merger
  • Speed Guaranty, AT&T guaranteed to maintain speeds of 6mbps “where feasible” for internet only customers.
  • DirecTV continuance, probably the most important commitment for current DirecTV customers, AT&T committed to operating DirecTV as a stand alone entity at it’s current price schedule that is the same for all customers for the next three years.

AT&T also made a commitment regarding net neutrality which is currently being reworked by the FCC. Although they’ve made these commitments the merger will go under federal scrutiny before it can close.

AT&T and DirecTV currently offer bundle packages that include DirecTV satellite services and AT&T internet services, primarily to customers that aren’t currently served by a “cable company”.

Although the dollar amount is the same many analysts feel that this isn’t “Comcast, Time Warner round 2” and will likely pass through federal regulators.