ITV agrees £1.6 billion Sky broadcasting arm sale

ITV has agreed to sell its media and entertainment arm to Sky for up to £1.6 billion.

The companies say the deal will create a major competitor to take on global streaming rivals.

The sale includes ITV’s terrestrial TV channels and streaming service ITVX, though it excludes its ITV Studios production arm, known for making shows including I’m A Celebrity… Get Me Out of Here!

However, bosses have warned the deal will mean job cuts across corporate and commercial divisions.

Sky employs about 20,000 staff in the UK, while ITV has about 2400 workers in its media and entertainment division.

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 is valued at £200 million.

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

Bosses say 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 in place to supply content to the newly-combined Sky and ITV.

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.”

Andrew Cosslett, ITV chair, added: “At a time of rapid change in the industry, it is right we secure ITV’s crucial role as a public service broadcaster.”

British broadcasters including ITV, BBC and Channel 4 have developed their streaming platforms in recent years to compete with US giants Netflix, Amazon and Disney.

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