As widely rumored, AT&T has formally announced their intention to purchase DirecTV for $95/share.
This purchase price implies a total equity value of $48.5 billion and a total transaction value of $67.1 billion, including DIRECTV’s net debt.
While this transaction, should it be approved, would result in one of the largest pay television providers, I see it largely as a defensive maneuver on AT&T’s part in an industry where they should be on the offensive with more forward thinking plays as linear television looks to contract. Further, it’ll be interesting to see how DirecTV’s negotiations with the NFL evolve given new ownership, with deeper pockets and potentially broader distribution potential … and if they are granted exclusive rights.