NEW YORK (TheStreet) -- AT&T (T) has divulged details on its proposed acquisition of DirecTV (DTV) in a SEC filing Wednesday. The telecom said cost synergies will exceed $1.6 billion three years after closing, namely involving savings in programming costs, operational efficiencies and reductions in redundant broadcast infrastructure. Content costs currently account for 60% of subscriber video revenues.
"With the scale this transaction provides, we estimate AT&T's U-verse content costs after the completion of the transaction will be reduced by approximately 20% or more as compared with our forecasted standalone content costs," the company said in its 8-K filing.
In mid-May, AT&T confirmed its stock-and-cash deal for the satellite TV provider, an acquisition worth $95 a share, or just under $50 billion. Federal regulators have yet to approve the merger.
TheStreet Ratings team rates AT&T INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AT&T INC (T) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."