DirecTV, AT&T Extend Merger Termination Date

Parties Wait For Regulatory Approval
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As expected, DirecTV and AT&T have agreed to extend the termination date of their planned $48.5 billion merger “for a short period,” as the deal winds through the regulatory approval process, DirecTV said in a Securities and Exchange Commission filing Friday.

In a brief filing with the SEC, DirecTV and AT&T said they have elected to extend the May 18, 2015 ‘Termination Date’ of the merger agreement for a short period of time to facilitate obtaining final regulatory approval required to close the merger.”

DirecTV agreed to be acquired by AT&T on May 18, 2014 and the termination date – which would allow the parties to end the deal if a final agreement wasn’t reached – was set at the time for one year after. As that anniversary is quickly approaching, both parties were expected to extend the date as the merger continues to go through the approval process.

While the Federal Communications Commission stopped the 180-shot clock on the merger on March 13, it is expected the deal will be approved. Most analysts expect the merger to pass muster sometime in July.

While Comcast’s $67 billion merger with Time Warner Cable went through several extensions before the deal was terminated on April 24, the DirecTV/AT&T deal does not have to clear the same regulatory hurdles. DirecTV has said the addition of AT&T’s broadband service will make it more competitive against Comcast and other video providers. The combined company also would not have the same level of broadband domination as regulators feared Comcast/TWC would have had. AT&T pledged it would extend its broadband service to about 11 million homes after the deal closed. Combined, A&T/DirecTV would have about 26 million video customers.      

Several companies have come out with conditions for the deal, with Dish Network and Cogent the latest, requesting net neutrality provisions that would ensure the combined company would not discriminate against over-the-top video providers.

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