DIRECTV (NASDAQ:DTV) and AT&T Inc. (NYSE:T) have a reason to celebrate as their plans to merge receive new hope.
The $48.5 million merger might soon receive the approval of the federal regulators. The two companies have decided to extend the terms of their merger that they had planned to take place on Monday. The decision to extend the duration was a mutual agreement by both firms. The extra time will give them the chance to obtain the final approvals as well as reaching the standards of the regulatory bodies.
During the time the merger was signed on May 18, the two companies did not anticipate that the process would take such a lengthy process. The delay was mostly as a result of the lengthy review process by the US Justice Department and the Federal Communications Commission.
The two companies anticipate the completion of the acquisition process because it will lead to more than 25 million new subscribers, especially in the US. AT&T hopes that the acquisition will be completed by the beginning of July.
In an investor report, AT&T Inc. (NYSE:T) said that it expects the merger to facilitate reduced costs thus allowing or more savings. The estimated annual savings will amount to $2.5 billion. Other competing firms in the TV industry such as Netflix and Dish have also pushed the federal organization to employ some changes and leniency to the process. This is because the companies stand to benefit from similar dealings in future. Additionally the merger will create some healthy competition.
A week ago, the federal organization faced a lot of criticism for trying to impose laws that would review too many details to competitors thus making it hard for lucrative TV deals to keep information under wraps. Fortunately for these companies, the court made its decision on the proposed regulations.
The acquisition of DIRECTV (NASDAQ:DTV) by AT&T is one of the most lucrative deals that has taken place in the TV industry. It will also add on to the many new mergers that have been taking place in 2015.