Sky, owned by US-based Comcast, has agreed to acquire ITV Media & Entertainment from ITV plc for a total consideration of up to £1.6 billion. The deal includes ITV’s acquisition of Love Productions, valued at £200m.
Following completion, ITV channels and ITVX will remain free-to-air, with its public service broadcasting commitments continuing to be met in full.
ITV reaches around 40 million people every week and serves more than 16.5 million monthly digital users. Combined with Sky, the business would account for around 20% of all in-home viewing in the UK, second to the BBC and ahead of YouTube.
Sky has agreed to enter into a £2.1bn content supply agreement over 5 years with ITV Studios on completion of the deal.
Programming acquired under the agreement will not count towards ITV independent production quotas, helping to ensure continued opportunities for independent producers across the UK.
Approximately £200 million in annual cost savings are expected to be generated on a run-rate basis by the end of the third year after closing. The majority will be delivered through efficiencies in marketing, technology platforms and non-UK content.
Dana Strong, Sky Group CEO, said: “This is a defining moment for British media and an opportunity to build a stronger future for two of the UK’s most loved and trusted brands. We have huge respect for the transformation the ITV team has delivered, particularly its successful move into streaming through ITVX, which has brought fantastic British content to millions of viewers across the UK.
“Bringing Sky and ITV Media & Entertainment together combines the very best of free-to-air television, pay TV and streaming, ensuring viewers across the UK continue to enjoy outstanding British programming in a rapidly changing world. ITV will remain a public service broadcaster at the heart of British life, and we’re excited about the future we can build together.”
Carolyn McCall (DBE), Chief Executive Officer, ITV plc, said: “ITV has successfully evolved in a rapidly changing media landscape – launching, and scaling, ITVX and developing ITV Studios into a major force in the global content market. This transaction builds on that momentum to deliver clear, tangible value for shareholders.
“At the same time, through the commitments made by Sky, the combined ITV M&E / Sky business will continue to deliver everything about ITV that our viewers and advertisers love and value and our people are hugely proud of – making programmes that reflect and shape society, bringing people together for shared experiences and having the quality, diversity and plurality that are the hallmarks of our contribution to the UK’s creative industries. In addition, all of ITV’s PSB commitments, including regional and national news, are safeguarded under the terms of the Channel 3 Licences until 2034, which Sky is acquiring as part of the transaction.
“I am also confident that Sky will be a strong and responsible custodian of ITV M&E, building on its heritage while investing in its future and safeguarding the qualities that make ITV so valued by viewers, advertisers and the UK’s creative industries.”
The £1.6bn consideration (subject to adjustment for cash, debt and net working capital), comprises £1.2 billion in cash, Love Productions, and up to £0.2 billion in performance-related earn-out, subject to customary conditions and regulatory approvals.
Pippa Considine
Share this story
