ITV agrees sale of media and entertainment business to Sky for up to £1.6bn

ITV has agreed the sale of its media and entertainment business to Sky for up to £1.6 billion, the companies have announced.

The agreement, subject to regulatory approval, follows months of talks, with the proposed sale first announced in November last year.

The companies said the deal will combine the division with Sky to create a major competitor to the global streaming giants.

The deal includes the ITVX platform, along with ITV’s free-to-air channels, but not its production arm, ITV Studios, which makes shows including I’m A Celebrity and the popular drama Mr Bates Vs The Post Office.

ITV Studios will become a “pure-play global content business” with its shares listed on the London Stock Exchange following the sale, and a long-term agreement to supply content to the newly-combined Sky and ITV, according to the broadcaster.

The transaction is expected to be completed in the second half of 2027.

Sky has committed to spending at least £2.1 billion over 2028-2032 on the partnership.

Under the terms of the deal, Sky will pay £1.2 billion for the broadcasting unit and sell its Love Productions business to ITV, which makes shows including the Great British Bake Off and The Piano, and is valued at £200 million.

The takeover does not include ITV’s production arm, ITV Studios, which makes shows including Mr Bates Vs The Post Office. / Credit: ITV/PA

ITV may also receive a payment of up to £200 million in two years, subject to its advertising sales performance.

The firms said the combined business will have a larger content budget, as well as the resources and technology to better compete with global streaming platforms in the UK.

Sky is owned by US media giant Comcast, which is in the process of splitting into two companies, with Sky’s European business set to become part of NBCUniversal.

Dana Strong, Sky’s group chief executive, said: “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.”

Andrew Cosslett, the chairman of ITV, said that “at a time of rapid change in the industry, it is right that we now secure ITV’s crucial role as a public service broadcaster” and that the combined business will “create a UK champion with the scale and resources to better compete with global streaming platforms”.