Free Essay On Good Afternoon,
Type of paper: Essay
Topic: Company, Unix, Business, Education, Market, Technology, Media, Television
This e-mail is to discuss the recent merger that has occurred between AT&T and DirecTV. There is an examination of these two technology companies and how this merger and an analysis of how this merger positively and negatively affected the merging companies. Possible reasons for this merger will be discussed as well as a in depth look into why we believe this merger took place.
As we all know technology is something that grows on nearly a daily basis. People are attempting to keep up with these changes on an individual level, and big companies are not different. The merging of these two companies, as found within our research, is so the company can diversify and expand its market. AT&T is a phone company and DirecTV is a well-known television provider that rivals well known companies such as Comcast. AT&T will be acquiring DirecTV in what is described in Forbes magazine as a “$49 billion dollar deal that would create a new telecom and television behemoth to rival cable firms” (Kang 1). This acquisition emphasizes Gaughan’s theory that other lines of business are acquiring different companies so that they can move into different markets. AT&T and DirecTV are not competitors in either market so it is an attempt for AT&T to expand their business and their customer base.
Looking at the studies by Mikolaj Piskorski there are different tests to consider when looking at this merger as well as merger’s in general, one test is known as the better-off test, “Does the presence of the corporation in a given market improve the total competitive advantage of business units over and above what they could achieve on their own” (Piskorski 204). While looking at this merger, the better-off test was used in order to determine whether or not this merger was one benefit to the company as a whole.
Have a great day,
Gaughan, Patrick. Mergers, Acquisitions, and Corporate Restructurings. New Jersey: John Wiley & Sons, 2011. Print.
Kang, Cecelia. “AT&T, DirecTV announce $49 billion merger.” The Washington Post 18 May 2014: Online.
Piskorski, Mikolaj. “Choosing corporate and Global Scope.” Harvard Business School, 2007. Print