Is the AT&T DirecTV Bid Just an Appetizer?

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2Q 2014 | IN-1019185


Dish May Have Some Competition


Following a relatively long and persistent set of rumors and public statements about a possible merger between United States satellite operators DirecTV and Dish, a new rumor has come to surface that AT&T is interested in DirecTV. As of the end of 2013, AT&T U-Verse had nearly 5.5 million United States video subscribers, while DirecTV had 20.25 million. AT&T also has about 14.7 million broadband households. Interestingly, however, DirecTV has 15.8 million subscribers in Latin America, in addition to 41% ownership of Sky Mexico with another 5.8 million customers. The growth has been the strongest in these regions, with 2013 revenue growth being 6.2% in the United States, 7.2% in Brazil, 9.6% in Mexico, and 12.7% in the rest of Latin America.

DirecTV’s market capitalization has surged 5% to 41.7 billion from about 39 billion (at about noon Eastern Standard Time on May 1st), implying that at a decent premium the deal may ...

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