AT&T Corp. said Monday it will acquire a 2.5 percent stake in DirecTv Inc. for $137.5 million as part of a marketing and distribution pact between the two companies.
AT&T will market and distribute DirecTv's satellite broadcasting service and equipment to its 90 million customers by midsummer. DirecTv, based in Los Angeles, is a unit of Hughes Electronics Corp. and provides a direct-to-home service that delivers up to 175 channels of programming to homes over an 18-inch receiving dish.AT&T said it has options to increase its investment to up to 30 percent during the next five years, depending primarily on the number of new DirecTv subscribers AT&T enrolls over specific time periods.
AT&T, based in New York, said it would be the only nationwide telecommunications company to market and distribute the DirecTv programming service. The two companies also plan to jointly develop new multimedia services for DirecTv as part of the agreement.
The pact is subject to the completion of definitive contracts and certain regulatory approvals.
Hughes is a unit of General Motors Corp.