AT&T has approached DirecTV about a possible acquisition of the satellite-TV firm, say people familiar with the situation, the latest sign of a possible shake-up in the television industry.

A combination of AT&T with satellite-TV firm DirecTV would create a pay television giant close in size to where Comcast Corp. will be if it completes its pending acquisition of Time Warner Cable .

DirecTV is the second biggest pay TV operator, serving about 20 million customers, while AT&T's landline-based TV business serves about 5.7 million. The nearly 26 million subscribers served by the combined company would compare with Comcast which—with TWC—would serve close to 30 million subscribers.

A deal would likely be worth at least $40 billion, DirecTV's current market capitalization, a fraction of AT&T's $185 billion market capitalization.

AT&T declined to comment. DirecTV declined to comment