M&A: AT&T to buy DirecTV for $48.5 billion; AstraZeneca rejects £69 billion bid from Pfizer
The telecommunications company AT&T wants to buy the largest satellite television provider, DirecTV, in a massive $48.5 billion deal. With more Americans cutting the cord and dumping their cable service, and with AT&T’s competitor Comcast also making a big TV service acquisition, few see the Federal government putting up any barriers to the deal.
“DirecTV is the best option for us because they have the premier brand in pay TV, the best content relationships, and a fast-growing Latin American business. DirecTV is a great fit with AT&T and together we’ll be able to enhance innovation and provide customers new competitive choices for what they want in mobile, video and broadband services,” said Randall Stephenson, AT&T Chairman and CEO.
Despite the fact that deals such as this are all about more money for management and investors, it is necessary to publicly say that such deals benefit consumers, of course.
“U.S. consumers will have access to a more competitive bundle; shareholders will benefit from the enhanced value of the combined company; and employees will have the advantage of being part of a stronger, more competitive company, well positioned to meet the evolving video and broadband needs of the 21st century marketplace,” said Mike White, president and CEO of DirecTV.
As part of the deal, AT&T said it would pledge to keep the net neutrality rules in place for three years, “rrespective of whether the FCC re-establishes such protections for other industry participants following the DC Circuit Court of Appeals vacating those rules.”
One assumes that after the three years all bets are off and AT&T will want to return to being…. well, AT&T.
In the U.K. the big M&A news was the deal that wasn’t. Big pharma firm AstraZeneca rejected a £69 billion takeover bid from U.S. pharma Pfizer. Shareholders, looking for a payday took shares of AstraZeneca down hard in trading today, but AstraZeneca’s chairman, Leif Johansson, said the bid still undervalued the giant pharmaceutical.
Pfizer is looking to bolt the U.S. to avoid paying U.S. corporate taxes and sees buying AstraZeneca has the way to do it. “Pfizer’s approach throughout its pursuit of AstraZeneca appears to have been fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimisation,” Johansson said.
“We have rejected Pfizer’s final proposal because it is inadequate and would present significant risks for shareholders, while also having serious consequences for the company, our employees and the life-sciences sector in the UK, Sweden and the US.”
Pfizer appears ready to accept that it won’t conclude the deal.
“We have tried repeatedly to engage in a constructive process with AstraZeneca to explore a combination of our two companies. Following a conversation with AstraZeneca earlier today, we do not believe that the AstraZeneca board is currently prepared to recommend a deal at a reasonable price,” Ian Read, Chairman and CEO of Pfizer, said in a statement.