Comcast’s Sky has finalized its $2.1 billion (£1.6 billion) deal to acquire ITV’s Media & Entertainment Unit, the companies announced on Monday.
The deal, which will include ITV’s linear channels and the ITVX streaming platform, also includes $1.6 billion in cash and up to $267 million in performance-related earn-out. Additionally, Sky News and ITV News will stay editorially distinct going forward.
The agreement further includes $2.8 billion in content spend with ITV Studios over the next five years, while Sky will acquire “The Great British Bake Off” producer Love Productions as part of the deal.
Approximately $267 million in annual cost savings are expected to be generated on a run-rate basis by the end of the third year after the deal’s closing. The majority will be delivered through efficiencies in marketing, technology platforms and non-U.K. content.
“This is a defining moment for British media and an opportunity to build a stronger future for two of the U.K.’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 U.K.,” Sky Group CEO Dana Strong said in a statement. “Bringing Sky and ITV Media & Entertainment together combines the very best of free-to-air television, pay TV and streaming, ensuring viewers across the U.K. 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.”
“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,” ITV plc CEO Carolyn McCall added. “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 — making programmes that reflect and shape society, bringing people together for shared experiences and having the quality, diversity and plurality that are the hallmarks of our contribution to the U.K.’s creative industries.”
“In addition, all of ITV’s PSB commitments, including regional and national news, are safeguarded under the terms of the Channel 3 Licences until 2034, which Sky is acquiring as part of the Transaction,” she continued. “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 U.K.’s creative industries.”
ITV, which reaches around 40 million people each week and serves over 16.5 million monthly digital users, would account for around 20% of all in-home viewing in the U.K. when combined with Sky — second to the BBC and ahead of YouTube.
The update comes a week after parent company Comcast announced its intention to split NBCUniversal into its own separate company.
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