DirecTV and Dish Network mulling over the idea of a merger, say analysts

DirecTV Group and Dish Network are planning to merge together in the satellite-based television programming. The two companies struck a deal about 10 years ago but was refuted by the Justice Department.

The two companies have seen a fierce competition from the likes of AT&T and Verizon Wireless in the pay-TV market. Since the merger deal was disapproved by Justice Department in 2002, both carriers have infiltrated a deeper into the consumer market.

In the light of this development in competition, both companies have joined heads to get to a deal. The current Obama administration might not be of great benefit to both of the companies but the re-election is expected to bring changes to their mind frame. But that is the view of one side of analysts; the other faction believes that Mitt Romney-led administration might bring more benefits to M&As.

“Certainly the industry has changed since the last time Dish pursued that kind of a transaction,” DirecTV CEO Mike White said. “You’ve got telcos in half the country now. You’ve got over-the-top rising and continuing to rise.

“And, most importantly, in my mind you’ve got a challenging content cost environment where consolidation could be pro-consumer perhaps.”

If the DirecTV and Dish do not come to mutual terms with each other, AT&T might have a shy at Dish for a possible merger in pay-TV market or an acquisition all together.

“An AT&T-Dish deal probably would be approved under a second Obama administration,” Paul Gallant, an analyst at Guggenheim Partners said. “But the odds would be somewhat higher, and the give-backs somewhat lower, under a Romney administration.”

The government, especially Federal Communications Commission and Justice Department might still not approve of any such mergers for the possible reason that consumers will have lesser choices in the rural areas. However, Romney-administration will certainly get be of greater benefits to all these companies.

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Posted by Usman Khalid on Oct 3 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.