By Liana B. Baker, Soyoung Kim and Marina Lopes

(Reuters) - AT&T plans to pay $48.5 billion to buy DirecTV, the top U.S. satellite TV operator, in a bid for growth beyond an increasingly competitive cellular market.

The deal, announced on Sunday, comes as Comcast Corp awaits regulatory approval of its $45 billion bid for Time Warner Cable Inc, a transaction that has the potential to transform the television landscape by creating a new cable and broadband Internet powerhouse.

AT&T said it is offering $95 per DirecTV share in a combination of stock and cash, a 10 percent premium over Friday's closing price of $86.18. The cash portion, $28.50 per share, will be financed by cash, asset sales, financing already lined up and other "opportunistic debt market transactions."

Analysts said the deal would help support AT&T's dividend even as it confronts tougher competition from upstart T-Mobile USA and other cellular operators that have pressured its average revenue per user.

"This is financial engineering," said Kevin Smithen, an analyst at Macquarie. "It is a transaction that secures the dividend for many years, taking advantage of AT&T's relatively high valuation and low interest rates to do an accredited acquisition that will bolster its free cash flow."

To facilitate regulatory approval, AT&T will sell its roughly 8 percent stake in Carlos Slim's America Movil. DirecTV has some 18 million customers throughout Latin America, in addition to its 20 million U.S. subscribers.

AT&T said it expects the takeover to deliver cost savings at an annual rate of $1.6 billion by the third year after closing.

COMPETITIVE CONCERNS

"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 Chief Executive Randall Stephenson said in a statement. "At the same time, it creates immediate and long-term value for our shareholders."

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Still, some analysts and investors have questioned why AT&T, which is facing slowing growth, would buy DirecTV at a time when U.S. satellite TV subscriptions have flattened.

The growth of web-based television services could mean that demand for satellite TV will slow further in the coming years.

AT&T, which is likely to face some questions from regulators about the deal's impact on competition in those areas where its U-verse service now competes with DirecTV in offering television, said it expected to be able to add 15 million broadband customers, mostly in rural areas, within four years after the takeover closes.

DirecTV's deal with Dallas-based AT&T, which has some TV and broadband services, is the latest in a string of big takeovers the wireless operator has considered. Those include an abortive bid for T-Mobile USA in 2011, as well as a potential takeover of Vodafone Plc that receded as a possibility after

The transaction has a total value of $67.1 billion, including DirecTV's net debt.

The deal, which comes after a 25 percent gain in DirecTV's stock price this year fueled by growing speculation about an AT&T takeover, represents a win for Warren Buffett's Berkshire Hathaway, the satellite provider's top shareholder.

Unlike many parts of Buffett's handpicked portfolio, the DirecTV holding is one of a series of bets by Todd Combs or Ted Weschler, brought on to help him with stock selection.

Goldman, Sachs and Bank of America Merrill Lynch acted as financial advisers to DirecTV, and Weil, Gotshal & Manges LLP, Jones Day and Wiltshire & Grannis LLP served as legal advisers. AT&T, which has an extensive internal M&A team, was also advised by Lazard.

DirecTV has agreed to pay a $1.4 billion breakup fee to AT&T in the event that it pursues another transaction with a higher bidder, a source familiar with the deal said.

The transaction raises questions about what DirecTV's biggest rival, No. 2 satellite TV operator Dish Network, might do. With 14 million subscribers, Dish trails DirecTV and has been exploring the wireless business, making bids for AT&T's smaller rival Sprint last year before SoftBank ended up winning it.

Dish's chief, Charles Ergen, has said that he does not have the cash to outbid AT&T for DirecTV. Dish tried to buy DirecTV in 2001 in a deal that was blocked by regulators.

AT&T will not have to pay a penalty if regulators veto the deal, the source said.

(Reporting By Mike Stone; Editing by Steve Orlofsky)