Georgia residents may have heard that cell phone giant AT&T is in the final stage of negotiations to acquire DirecTV. Apparently, all that is left is to get the approval of the boards of both companies. This move comes after a couple of failed mergers and acquisitions by AT&T.
The merger would allow AT&T to offer customers more bundled services. Customers could get their wireless, Internet, television and landline services all in one place. DirecTV customers may be able to obtain Internet service wherever AT&T’s U-Verse service is available. The lack of an Internet service offering for customers has reduced the satellite television provider’s customer base.
The merger has the potential of bringing nearly 20 million more customers to AT&T. However, detractors point to the fact that satellite subscriptions are down in the United States, and the cell phone giant is not growing as rapidly as it has previously. On the other hand, DirecTV has grown.
Of course, even if the boards of these companies approve the merger, regulators must approve the deal. Currently, some concern exists regarding a potential reduction in competition. The main area of concern for this deal is most likely going to be the overlap in television services. As a result, some subscribers to either service could lose approximately 25 percent of their video choices.
When it comes to mergers and acquisitions, it is not always just a question of one company wanting to purchase another. Georgia businesses must ensure they are in compliance with the state and federal laws and regulations that govern these types of transactions. Those companies facing these circumstances will surely rely upon professional advice and guidance so that the deals will have the best chance at success.
Source: Reuters, “AT&T nears DirecTV purchase in new jolt to TV landscape“, Soyoung Kim and Liana B. Baker, May 17, 2014