Regulators Allow Large TV Services Business Merger To Proceed

On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Mergers & Acquisitions on Wednesday, July 29, 2015.

Laws regulating business and commerce are aimed at maintaining a free marketplace. This means regulators need to be aware of proposed mergers that may possibly constitute a monopoly and ultimately constrain the free flow of market prices of specific goods and services in California. Regulators were initially concerned about the proposed business merger between AT&T and DirecTV. However, it turns out that the regulators ultimately approved the deal.

The announcement that regulators are allowing the merger to take place came in late July. AT&T will now be able to move forward with plans to purchase DirecTV, a satellite TV provider. The deal will make AT&T the largest pay television services provider in the world. The company will now have 26 million subscribers in the United States.

However, approval of the merger did take considerable work on AT&T's part. The company had been in talks with regulators in order to work out terms of a deal that would be acceptable to the Federal Communications Commission. The final terms agreed upon included AT&T promising to expand its Internet services to rural areas while also expanding the company's gigabit fiber broadband service to 12.5 million users. The company also had to allow Internet customers access to competing video services as well as refrain from utilizing usage caps, which are seen as anti-competitive.

On the other hand, not every business merger will be approved by regulators in California. Also, other firms in the industry may pursue litigation in order to stop a proposed merger for one reason or another. In these cases, it may be necessary to take appropriate legal action in order to make sure a planned acquisition deal moves forward.

Source: wired.com, "AT&T-DirecTV Merger Creates World's Largest Pay TV Company", Klint Finley, July 24, 2015


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