The AT&T / DirecTV Deal Could Signal a Slew of Related M&A Activity
The news that AT&T has made a $49 billion offer to acquire DirecTV came as no surprise to readers of the Intralinks Deal Flow Indicator (DFI) report.
20 May 2014
The news that AT&T has made a $49 billion offer to acquire the satellite communications provider DirecTV came as no surprise to readers of the Intralinks Deal Flow Indicator (DFI) report. For the last few quarters we've predicted a significant uptick in deal count in the Telecommunications, Media and Technology (TMT) sector. While the AT&T/DirecTV deal is a blockbuster by any measure, it likely signals heightened activity across the TMT segment through the rest of the year.
The AT&T offer to acquire DirecTV will net the telecommunications company over 20 million DirecTV subscribers in North America and a further 18 million across Latin America, making it one of the largest players in the subscription media business. The deal falls on the heels of the recent Comcast agreement to buy Time Warner Cable for $45 billion, and Sprint is continuing to move ahead on a bid for T-Mobile US. All of this matchmaking will increase pressure on rivals to find partners that will give them additional heft so they can effectively compete. Deals by AT&T, Comcast and others to expand their businesses and execute on inorganic strategic options means the rest of the market will likely follow suit, albeit at a smaller scale. While many consumer advocates have voiced concerns about potential market monopolies, the heightened levels of deal activity will likely increase buyer premiums and bodes well for M&A professionals, who will be kept busy for the rest of 2014.