AT&T eyes US$40b DirecTV takeover: report

US telco AT&T has directly approached satellite pay TV firm DirecTV about a possible takeover, according to US reports.

The Wall Street Journal cited ‘people familiar with the situation’ in its report, which said the deal would be worth about US$40 billion.

AT&T wants to ramp up its video services. Last year it was one of the companies linked to a bid for streaming service Hulu and last month it linked with Peter Chernin’s media company for an initiative that will see the partners sink US$500 million in over-the-top TV services.

The telco currently operates the US IPTV service U-verse and a DirecTV deal would create a pay TV giant with about 26 million subscribers.

There is a lot of speculation about consolidation in the US pay TV market. In March Bloomberg reported Dish had approached DirecTV to discuss a possible merger while Comcast is in the throes of taking over rival MSO Time Warner Cable.