8-KMaterial AgreementsOther EventsExhibits & Filings

AT&T INC. 8-K Report, Material Agreement (May 19, 2014)

Filed May 19, 2014For Securities:TT-PCTBBT-PA

Summary

AT&T Inc. announced on May 18, 2014, a definitive agreement to acquire DIRECTV in a transaction valued at approximately $48.5 billion. This significant move involves AT&T acquiring DIRECTV for a combination of stock and cash, with the exchange ratio of AT&T shares for DIRECTV shares subject to an average stock price calculation over a 30-day period leading up to the merger's effective time. The deal aims to enhance AT&T's presence in the video market and expand its reach, particularly to customers without existing AT&T broadband services. The acquisition is subject to customary closing conditions, including regulatory approvals from antitrust bodies and the FCC, as well as the adoption of the merger agreement by DIRECTV stockholders. The agreement includes provisions for termination fees under certain circumstances, such as if DIRECTV's board changes its recommendation or enters into a superior proposal, or if the merger is not completed by the specified termination date of May 18, 2015 (with potential extensions). The deal's structure and conditions suggest a strategic expansion for AT&T into the pay-TV landscape.

Key Highlights

  • 1AT&T Inc. entered into a Merger Agreement to acquire DIRECTV for approximately $48.5 billion (stock and cash).
  • 2The transaction structure involves a merger where DIRECTV will be merged with a wholly-owned AT&T subsidiary.
  • 3DIRECTV shareholders will receive AT&T common stock and $28.50 in cash per share, with the stock portion determined by an 'Exchange Ratio' based on AT&T's average stock price.
  • 4The deal is contingent on various conditions, including DIRECTV stockholder approval, HSR Act clearance, and FCC approvals.
  • 5The agreement includes provisions for customary representations, warranties, and pre-closing covenants for both parties.
  • 6Termination rights and a specified 'Termination Fee' are outlined, payable by DIRECTV under certain conditions, such as the termination of the agreement due to DIRECTV entering into a superior proposal.
  • 7The filing incorporates by reference the full Merger Agreement and a joint press release announcing the transaction.

Frequently Asked Questions

The total value of the proposed acquisition of DIRECTV by AT&T is approximately $48.5 billion, comprised of stock and cash.

DIRECTV shareholders will receive a combination of AT&T common stock and $28.50 in cash for each share of DIRECTV common stock they hold.

Key conditions include the adoption of the merger agreement by DIRECTV's stockholders, expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and receipt of all necessary consents from the Federal Communications Commission (FCC) and certain state public utility commissions and foreign governmental entities.

Yes, the Merger Agreement includes mutual termination rights and a specified 'Termination Fee' of $1,445,000,000. This fee is payable by DIRECTV under certain circumstances, such as if the DIRECTV board changes its recommendation or if DIRECTV enters into an agreement for a superior proposal, or if the merger is not completed by the termination date and certain conditions are met.