Sky, the pay-TV heavyweight, has agreed a deal with ITV to acquire the UK commercial broadcaster’s media and entertainment business for £1.6 billion ($2.1 billion).
The agreement to buy ITV Media & Entertainment has been reached following months of negotiations, which were first revealed in November.
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The deal, subject to shareholder and regulatory approval, will create the UK's largest commercial broadcaster via the acquisition of the ITVX streaming platform and ITV's free-to-air channels. The acquisition will not include the ITV Studios production arm.
Following completion, ITV channels and ITVX will remain free-to-air, with its public service broadcasting commitments "continuing to be met in full."
The transaction aims to create a UK-focused streaming giant to compete with major players in the space, such as Netflix and Amazon Prime Video.
According to Sky's chief executive, Dana Strong, the integrated streaming platform will have over 16 million viewers every month.
Strong also stated that the combined business could “supercharge” ITV's sports offering.
She added: "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.”
The combined Sky and ITV entity will spend at least £2.1 billion from 2028 to 2032.
Sky – which in the UK is possibly best known for its wide range of live rights to premium sporting properties – has been owned by US media giant Comcast since 2018, with Comcast also owning NBCUniversal in the US.
Most prominently, Sky holds the largest chunk of domestic rights to English soccer's Premier League, while it is also the main UK broadcaster for properties such as motor racing's Formula 1, the NFL, the home English cricket season, and golf's Ryder Cup.
ITV, meanwhile, shares rights to major international soccer tournaments (including the men's and women's FIFA World Cup) with the BBC public broadcaster, while it also covers a diverse range of properties from sports such as rugby, cycling, electric motor racing, horse racing, and darts.
The deal will enable Sky to offer customers and advertisers packages including free-to-air, pay-TV, and streaming options. The potential deal with Sky does not include the ITV Studios production arm.
Last year, ITV said it would have to enact £35 million in cost savings. One of the broadcaster’s largest single shareholders, Liberty, sold off half of its 10% stake in October.
Carolyn McCall, ITV chief executive, 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.
“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.”
