Sky is reportedly close to acquiring ITV’s broadcast and streaming division in a major £1.6 billion deal.
The agreement, which includes the ITVX platform and ITV’s traditional broadcast channels, is designed to create a UK-based streaming powerhouse capable of rivalling global players such as Netflix and Amazon Prime Video.
As part of the proposed transaction, Sky will transfer Love Productions—producer of The Great British Bake Off and The Piano—to ITV Studios.
That element of the deal is estimated to be worth between £80 million and £120 million and would make Love Productions part of ITV’s production arm.
The transaction is expected to include an additional earn-out of around £200 million, depending on the future performance of the Media & Entertainment division.
Sources have told Reuters that the deal, now at an advanced stage, remains in the hands of lawyers and faces possible timing delays due to final legal complexities.
The deal’s conclusion would mark the end of a lengthy process, first made public in November when ITV confirmed it was in talks to sell its Media & Entertainment division to Sky.
ITV has since undertaken the complex task of separating its broadcast and streaming operations from ITV Studios, which will be a standalone company following completion.
Shares in ITV rose by 2.9% following news of progress on the deal, giving the group a market value of approximately £3.1 billion.
Sky and ITV have been contacted by Newsquest for comment.
Who needs to approve the potential Sky-ITV deal?
The UK's Competition and Markets Authority (CMA) and media regulator Ofcom would both need to approve the deal, Variety reports.
Recommended reading:
- Call the Midwife and Downton Abbey stars join the cast of ITV's new 'tragic' drama
- Netflix to drop 'gripping' drama with 91 per cent Rotten Tomatoes rating
- Coronation Street star leaves more than £300,000 in his will after death aged 90
The final decision would then lie with the government’s culture secretary, Lisa Nandy.
Rival broadcasters Channel 4 and Channel 5, which are both dependent on advertising revenue, are likely to oppose the deal on competition grounds.
Another issue is ITV’s 40% stake in ITN, which supplies news output to Channel 4 and Channel 5 as well as ITV.
What are your thoughts on this potential acquisition going through? Let us know in the comments.
