AT&T has held takeover discussions with DirecTV, reports The Wall Street Journal, which notes that the talks are “the latest sign of a possible shakeup in the television industry.”
Combining AT&T with satellite-TV operator DirecTV would create a rival close in size to what Comcast will be if it completes its proposed merger with Time Warner Cable, the piece notes.
The story adds: “DirecTV is the second-biggest pay TV operator, serving about 20 million customers, while AT&T's landline-based TV business serves about 5.7 million. The nearly 26 million subscribers served by the combined company would compare with Comcast which — with TWC — would serve close to 30 million subscribers.”
A deal would likely carry a $40 billion price tag, comparable to DirecTV’s current market value. Both AT&T and DirecTV declined to comment.
“The approach has come since Comcast struck its Time Warner Cable deal in February," the WSJ report notes, citing a source who's familiar with the situation. The report adds: "It is unclear whether the companies are in detailed talks, but another person familiar with the situation said that DirecTV would be open to a deal. The satellite TV industry is facing a slowdown in subscriber growth after years of adding customers. The pay television market in the U.S. is now mature, with about 90% of U.S. households with TV now subscribing to either cable, satellite or phone company-delivered television.”