AT&T Inc. officials have reportedly been in talks with DirecTV to buy the cable company for close to $50 billion.
People familiar with the situation said that management of DirecTV, the biggest satellite television provider in the U.S., will continue to run the company as a unit of AT&T under the deal, according to Bloomberg.
Due to the information being private, the sources asked to remain anonymous.
They added that Mike White, CEO of DirecTV, is planning to retire after 2015.
A person familiar with the discussions said the price of the deal is in the "low-to-mid 90s" per DirecTV share, but that it could still be weeks before the deal is finalized, USA Today reported.
The discussion between the companies follows Comcast's acquisition of Time Warner Cable for almost $45 billion earlier this year.
AT&T's purchase of DirecTV would be an advantage for AT&T's wireless, phone and high-speed broadband Internet services. More people are watching videos online, resulting in an increase in pay-TV customers in the U.S. DirecTV would benefit from the deal because it would have an Internet package, which would help with competition, Bloomberg reported.
"With DirecTV they are getting a national TV appearance - they can sell TV with wireless nationwide," said Roger Entner, an analyst with Recon Analytics. "AT&T has increasingly been breaking out of their 22-state landline footprint. They sell wireless, they started selling home security and they could add TV to that package."
AT&T's pay-TV service is offered through the company's U-verse brand. While its market reach is limited, it can be expanded with the acquisition, USA Today reported.
The deal could lead to problems for both companies due to consumer groups opposing mergers of media companies. However, Jimmy Schaeffler, an industry analyst at The Carmel Group, said the AT&T-DirecTV deal may stand "a better chance than the Comcast-Time Warner Cable deal."
"But it's not as logical," he said. "You would be paying for two infrastructures and merging two different types of technologies. It is a strange land in telecommunications right now."
