AT&T Inc. (T, Financial)(4.0%) (T – $32.58 – NYSE) is the largest telecommunications holding company in the United States, serving 124 million mobile subscribers (including 110 million retail customers), 23.5 million wireline voice connections, 16.0 million broadband, and 39 million video customers (including 26 million in the U.S.). On July 24, 2015, AT&T completed its acquisition of DIRECTV, a leading satellite TV operator in the U.S and Latin America, in a cash-and-stock transaction for $95 per share. Main reasons for DTV transaction include
(a) creation of a content distribution leader across mobile, video, and broadband platforms, (b) improvement of revenue mix, acceleration of broadband growth, and significant expansion of revenues outside of the U.S.,
(c) accretion to FCF per share and adjusted EPS (within 12 months after the close). Management continues to expect $2.5 billion or better annual run-rate cost synergies from the DIRECTV transaction by 2018. This target doesn’t include numerous revenue synergy opportunities, including cross-selling additional products to each customer base, enhanced retail distribution, and advertising opportunities. Major cost synergy categories include content, operations, and supply chain.
From GAMCO's Global Telecommunications Fund third quarter 2015 shareholder commentary.
