Western Digital to pay $2.7 billion for DirecTV merger

AT&T’s $2 billion acquisition of DirecTv is a “significant step forward” in its bid to take on the cable giant, which has already acquired several smaller businesses, said a source familiar with the deal.

The acquisition of the cable and satellite provider will be the largest consolidation in the history of the industry, the source said.

The merger, the second of its kind in U.S. history, will create the nation’s third-largest digital TV provider with about half of U. S. households subscribing to digital TV services.

The deal also includes DirecVisions, a cable television network.

DirecTV shares rose 2% in afternoon trading.

Shares of AT&t fell 3% to $68.30.

The company has been seeking to expand its digital TV business, including buying streaming video services like Netflix, which could give it an edge over other cable operators in a market that has been saturated by cable TV and Internet video services.AT&T said in October that it would acquire Direcvision and DirecSports, which owns Direc Networks, in a deal valued at $3.6 billion.

AT&ts said it will combine the two businesses and make them into a single digital TV service.

The deal with Direc is expected to close by the end of the year, according to a person familiar with it.

Diresports shares were up 1.5% to close at $73.99.