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Update 3:55pm ET: Adds AT&T response
Telecommunications operator AT&T (New York Stock Exchange:T) and joint venture partner TPG Capital (NASDAQ:TPG) are in talks to merge their DirecTV service with EchoStar's (NASDAQ:SATS) Dish, Bloomberg reported Saturday, citing people familiar with the matter.
The agreement would create The largest pay-TV provider in the United States, but this is not the first time the companies have tried to merge. The companies tried to combine in 2022, but were prevented from doing so by the US Department of Justice.
According to the report, negotiations between DirecTV and EchoStar are in the early stages. A deal has not yet been reached and the talks could end without one.
“We do not comment on rumors or speculation,” an AT&T spokesperson said.
Dish did not immediately respond to a request for comment from Seeking Alpha.
While the deal is expected to draw renewed antitrust scrutiny, the market has since expanded with the entry of players including amazon (AMZN) Prime Video, Google (GOOG) (GOOGL) YouTube TV, Netflix (NFLX), Comcast (CMCSA) and Charter (CHTR).
AT&T (T) spun off DirecTV as part of a deal with TPG in 2021 in a deal that valued the company at $16 billion. The telecom giant gave up operational control of the satellite provider and its U-verse and AT&T TV operations, while maintaining a 70% financial stake in a DirecTV spinoff company.
AT&T (T) had reportedly been considering options for the joint venture, including a dividend recapitalization, bringing in a new investor, or selling the joint venture.
Last week, Disney (DIS) cut off access to its network to more than 11 million DirecTV subscribers after the two failed to renew their distribution agreement before it expired on Sunday.
In August, a judge blocked a major joint sports streaming service planned for the fall by Disney (DIS), Fox (FOX) (FOXA) and Warner Bros. Discovery (WBD).
