The merger will dramatically expand AT&T's customer base -- thanks to DirecTV's 20 million subscribers -- and help it compete more effectively with Comcast, which bought Time Warner Cable earlier this year.
The telecommunications giant purchased DirecTV for $95 a share in cash and AT&T stock.
"This is a unique opportunity that will redefine the video entertainment industry and create a company able to offer new bundles and deliver content to consumers across multiple screens -- mobile devices, TVs, laptops, cars and even airplanes," AT&T CEO Randall Stephenson said in a statement.
The Dallas-based company also said that DirecTV's "fast-growing Latin American business" played a role in the merger.
Celebrity Couples of 2014 [PHOTOS]