The WSJ reports "AT&T Inc. agreed to acquire DirecTV for $49 billion, a deal that would make it a major player in pay television and increase its clout with media companies at a time when video consumption is moving online.
The agreement, which the companies' boards approved on Sunday, comes just three months after Comcast Corp.'s $45 billion agreement to buy Time Warner Cable Inc".
The deals show how the biggest companies in television and telecommunications are bulking up to face a changing media landscape. Growth is slowing in some markets, like pay TV and wireless subscriptions, and is exploding in others, like streaming video. The companies are betting that bigger scale will give them the resources to invest in new capabilities and the leverage to hammer out commercial arrangements in the media world.
The combination would create a company with 26 million pay-TV subscribers in the U.S. That is second only to Comcast and Time Warner Cable, which would have about 30 million combined subscribers if regulators approve their deal and pending divestitures are completed.
"There would not be many people who could put together something with a nationwide mobile platform, nationwide video platform and a 70 million household broadband build," AT&T Chief Executive Randall Stephenson said in an interview.
AT&T said it would pay $95 per DirecTV share, about $66.50 a share in the form of its own shares and $28.50 in cash.
The companies have considered a combination for years and the CEOs came to the basic outline of the deal two weeks ago, Mr. Stephenson said. DirecTV CEO Mike White gave him a tour of the DirecTV offices in Los Angeles, and the final terms were sealed between the two over the phone, he said.
The deal is Mr. Stephenson's biggest bet so far and is AT&T's largest acquisition since its 2006 purchase of BellSouth for $85 billion. Mr. Stephenson became CEO in 2007 after his predecessor, Ed Whitacre, took a regional phone company and turned it into a national giant.
Mr. Stephenson has struggled to pull off a big-ticket transaction. He attempted to buyT-Mobile US Inc. in 2011, but was shot down amid regulatory concerns. He said on Sunday the Comcast deal didn't factor into his decision on DirecTV, saying that the two deals aren't similar in nature and highlighting the mobile-video aspect of the combination.
For DirecTV, the combination ends a period of uncertainty during which the company has struggled to chart a road map for growth in a stagnating U.S. pay-TV industry. Unlike cable providers, the satellite company doesn't have a piece of the burgeoning broadband-access market.
