Industry

Sky has agreed to acquire ITV Media & Entertainment from ITV plc in a transaction valued at up to £1.6 billion, bringing together two of the UK's biggest media companies to strengthen their position against global streaming platforms. The deal includes £1.2 billion in cash, Love Productions and up to £200 million in performance-related earn-outs, subject to customary regulatory approvals. As part of the agreement, Sky has also committed to a £2.1 billion, five-year content supply deal with ITV Studios, supporting investment in British programming and production.

Following completion, ITV's broadcast channels and streaming platform ITVX will remain free-to-air, while all public service broadcasting obligations, including national and regional news, will continue unchanged. ITV News and Sky News will also remain separate editorial operations. The combined company will unite free-to-air television, subscription TV, advertising-supported streaming and Sky's broadband and mobile businesses. Together, Sky and ITV Media & Entertainment are expected to account for around 20% of UK in-home viewing, positioning the business behind the BBC and ahead of YouTube.

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.”

ITV plc CEO Carolyn McCall added: “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.”

Sky expects the combination to generate approximately £200 million in annual cost synergies by the end of the third year after closing, driven primarily by efficiencies in marketing, technology platforms and international content acquisition.