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AT & T (Directv)

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Introduction An acquisition strategy is defined as one company buying controlling interest in another company (Hitt, Ireland, & Hoskisson, 2013). AT&T recently utilized this strategy to acquire DirecTV for $48.5 billion and become the number two Pay-Tv provider in the U.S. (Popper, 2014). AT&T is a well-known telecom giant offering phone services counting Verizon, Time Warner, and Sprint among its competitors. This case analysis will include a brief organizational background for both AT&T and DirecTV, details regarding the acquisition, an analysis of the acquisition and a summary of findings related to the acquisition and recommendations for the future strategic direction of the company.
Background Information
AT&T
AT&T Inc., founded in 1877 by Alexander Graham Bell and his partners, is today one of the largest telephone and cable television companies in the United States (CNN Money, 2001). AT&T has become a highly diversified company with multiple revenue streams from enterprise, consumer and mobility businesses (AT&T Inc., …show more content…

According to Gottfried (2015), the acquisition of DirecTV by AT&T is not without risks, DirecTV’s long term value hinges on AT&T’s “ability to navigate the transition between traditional TV viewing and TV viewed over the Internet.” Furthermore, Gottfried (2015) points out that there is evidence that the Pay-Tv industry is declining, and the opportunity for expansion from the acquisition is small since AT&T offers a video service through

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