AT&T, the US' largest telecoms operator, is prepared to spend up to $40 billion to acquire direct broadcast satellite services provider, DirecTV.

Should AT&T and DirecTV reach an agreement, it would be one of the largest, if not the largest, pay-TV industry acquisition in US history.

The Wall Street Journal said the deal, if approved, will combine DirecTV's 20 million TV subscribers with AT&T's U-verse TV offering, which has 5.7 million subscribers. AT&T wants to more closely integrate its TV and broadband services, hence its interest in DirecTV.

DirecTV is said to be open to a merger with AT&T. Talks between both companies have intensified since Comcast announced its intention to buy Time Warner Cable for $45 billion.

DirecTV had $8.6 billion in revenue in 2013. It provides satellite-TV service to some 20 million subscribers in the US and 17 million in Latin America. AT&T's U-Verse TV service, which uses fiber optic lines, gained 201,000 customers in the first quarter to reach 5.7 million.

In 2013, DirecTV's US revenues rose six percent to $24.68 billion year-on-year thanks to its increasing average revenue per user. On the other hand, net subscriber additions dropped from 199,000 to 169,000 in the previous year.

The decline in gross additions was in part due to a more challenging competitive environment and mature industry, DirecTV said earlier this year.

DirecTV has the second largest pay-TV subscriber base in the US but lacks a competitive broadband Internet offering of its own. Last March, there were rumors that Dish Network was interested in a merger with DirecTV.