Sky has agreed to acquire the broadcast channels and streaming service of ITV for £1.6 billion ($2.13 billion), creating one of the largest media businesses in the UK as traditional broadcasters seek greater scale to compete with global streaming platforms.
The transaction, announced on Monday.
The deal will now undergo scrutiny from regulators and lawmakers before it can be completed.
Deal positioned as a strategic move
Sky Chief Executive Dana Strong described the acquisition as a landmark moment for the British broadcasting industry.
She said the transaction was a “defining moment”, adding that it would rank among the biggest deals in the history of British broadcasting.
Strong also said the combined business would continue to deliver “outstanding British programming” despite the rapidly evolving media landscape.
“ITV will remain a public service broadcaster at the heart of British life, and we’re excited about the future we can build together,” she said.
The combination brings together Britain’s largest free-to-air commercial broadcaster and Sky, one of the country’s leading pay-TV companies.
Such a merger would have been difficult to imagine only a few years ago.
However, the growing dominance of streaming services and online video platforms has increased competitive pressure on traditional television companies.
Regulatory focus on the advertising market
The merged business would account for more than 70% of the UK television advertising market.
The estimate includes third-party advertising sales contracts currently managed by Sky.
To address potential regulatory concerns, Sky could be required to give up some of those third-party advertising sales agreements, including contracts involving Paramount-owned Channel 5.
The transaction is expected to become an important test case for Britain’s regulatory approach to large media mergers.
Market participants will closely watch whether a deal of this scale receives approval after the government called on regulators in 2025 to prioritise conditions that support economic growth and investment.
The agreement also comes shortly after Culture Minister Lisa Nandy indicated that she could intervene in the proposed Paramount-Warner transaction, signalling a willingness to shape major media deals.
Combined business targets greater scale
The combined ITV-Sky company is expected to reach more than 20 million households across the UK.
The companies are expected to argue that greater scale has become essential as traditional television continues to lose viewers to streaming platforms and YouTube, particularly among audiences aged between 16 and 24.
The merged company has also committed to spending a minimum of £2.1 billion between 2028 and 2032.
ITV to continue as independent production business
Following completion of the transaction, ITV will continue as a standalone production business.
The company will produce programmes for the combined ITV-Sky business, including Love Island and Coronation Street.
It will also continue making content for other broadcasters and streaming platforms globally, including Rivals for Disney and The Reluctant Traveller for Apple TV.
Under the terms of the agreement, ITV will receive £1.2 billion in cash.
The company could also receive up to £200 million through an earn-out arrangement linked to its advertising performance during the 2027 financial year.
As part of the transaction, ITV will also acquire Love Productions, the producer of “The Great British Bake Off”, which will become part of the remaining ITV Studios business.
ITV shares rise following announcement
ITV shares were up 0.5% at 82 pence in early trading on Monday.
The broadcaster has faced a challenging advertising market in recent years, with its shares declining 36% over the past five years.
Sky, meanwhile, has undergone significant ownership changes over the past decade.
The company was closely associated with the Murdoch family for many years before Comcast acquired it in 2018.
In June, Comcast announced plans to separate its media assets, including NBCUniversal and Sky, from its cable business, reflecting the increasing competitive pressure posed by streaming services.
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