Washington, D.C. (March 18, 2013) -
Seemingly within minutes of the news that DIRECTV was no longer
a bidder for the Brazilian telecom company GTT, speculation
surfaced Friday that the satcaster would seek a merger with its
rival satellite service, Dish.
Shares of DIRECTV rose 4.5 percent on Friday after a Wall Street
analyst said the merger was now more likely while Dish's stock
increased three percent.
Macquarie's Amy Yong, wrote in a note to investors that a
satellite merger would face regulatory obstacles but would be a
boon for both companies because it would create both "long term
and short term synergies" as well as make the new company more
competitive, writes the Denver Post.
Dish execs Charlie Ergen and Joe
Clayton and DIRECTV CEO Mike White have repeatedly hinted their
companies could merge at some point. While Dish has also been
linked to a possible merger with AT&T and others, DIRECTV makes the most sense.
Noting the increased competition -- and the rising cost of
acquiring programming -- DIRECTV late last year
the wisdom of bringing the companies together.
However, the two companies agreed to merge in 2001 but the deal
was blocked by federal regulators on grounds that it would be
anti-competitive. Although there are more video providers on the
scene now compared to 2002, the FCC and Justice Department would
likely still be resistant to a satellite merger.