The ~$67 Billion AT&T–DIRECTV Merger Is Done




AT&T (T) has finally acquired DIRECTV (DTV) for ~$67.1 billion, including net debt. This was the transaction value initially announced in May 2014 when the AT&T–DIRECTV merger agreement was signed. The telecom company announced the completion of the DIRECTV merger on July 24, 2015—the same day the FCC (US Federal Communications Commission) approved the deal.

According to AT&T, the deal value was ~$47.1 billion, excluding the net debt and after taking into account AT&T’s closing stock price on July 24, 2015. The DIRECTV deal value consists of ~$32.7 billion in AT&T stock and ~$14.4 billion in cash. For each share, DIRECTV shareholders get ~$28.50 in a cash consideration and 1.892 shares of AT&T.

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About DIRECTV and AT&T

DIRECTV is a DBS, or direct broadcast satellite services provider. It operates in Latin America and the US. It’s the largest satellite TV provider in the US. The second-largest is Dish Network (DISH). DIRECTV had a market capitalization of ~$47.18 billion as of July 24, 2015.

AT&T is the second-largest US telecom company, with a market capitalization of ~$178.28 billion as of July 28, 2015. AT&T has the largest wireline telecom operations in the US. It’s the second-largest player in the US wireless industry.

In the US, Verizon (VZ) is the largest telecom company by market capitalization. It also has the biggest market share in the US wireless industry.

Investing in telecom

Instead of directly investing in the stock, you can get exposure to AT&T by investing in the Technology Select Sector SPDR Fund (XLK). This ETF had ~4.6% invested in the carrier on June 30, 2015. You could also get more diversified exposure to AT&T by investing in the iShares Core S&P 500 ETF (IVV). IVV had ~1% of its portfolio invested in the carrier on the same date.


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