It’s finally official. Comcast-owned U.K. pay-TV operator Sky has agreed to acquire ITV‘s Media and Entertainment business for total consideration of up to £1.6 billion ($2.14 billion).
The deal, expected to close in the second half of 2027, will separate ITV Studios into a standalone global content business and return roughly £950 million ($1.27 billion) to shareholders.
The consideration comprises £1.2 billion ($1.61 billion) in cash at completion, the contribution of Sky’s Love Productions – maker of “The Great British Bake Off” and “The Piano” – valued at £200 million ($268 million), and up to £200 million ($268 million) in contingent payments payable in the second half of 2028, tied to advertising revenue performance in fiscal 2027. Sky is fully owned by Comcast, and both Sky and ITV’s M&E business are expected to become part of NBCUniversal once Comcast’s planned separation is complete.
Net cash proceeds from the sale are projected at approximately £1.05 billion ($1.4 billion) after roughly £185 million ($247 million) in transaction and separation costs. ITV plans to use the proceeds first to reduce ITV Studios’ leverage to around 1.5 times net debt to EBITDA, then return about £950 million ($1.27 billion) to shareholders, equivalent to 25p per share, excluding any contingent consideration.
As part of the transaction, ITV Studios will sign a long-term content supply agreement with ITV M&E and Sky covering shows including “Coronation Street,” “Emmerdale,” “Love Island,” “I’m a Celebrity…Get Me Out of Here!” and its daytime slate, with a guaranteed minimum spend totaling £2.1 billion ($2.81 billion) between 2028 and 2032.
Andrew Cosslett, chair of ITV plc, said: “For over seven decades, ITV has played an important and cherished role in the public life of the nation. 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 this transaction achieves this with ITV’s Media and Entertainment division combining with Sky to create a U.K. champion with the scale and resources to better compete with global streaming platforms.”
Carolyn McCall, chief executive officer of ITV plc, added: “I am 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.”
McCall framed the transaction as a continuation of ITV’s move into streaming through ITVX and its growth into a major global content producer. All of ITV’s public service broadcasting commitments, including nations, regional and national news, remain protected under the Channel 3 licenses that Sky is acquiring, which run until 2034.
Dana Strong, group chief executive officer of Sky, said: “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.”
Strong said the deal reflects respect for ITV’s push into streaming through ITVX and unites the different ways British audiences watch television under one roof.
“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,” Strong said.
The transaction values ITV M&E at an EV/EBITDA multiple of approximately 5.6 to 6.4 times 2025 earnings, in line with recent precedent deals, according to ITV. Post-completion, ITV Studios is expected to operate with adjusted EBITA margins of 13 to 15% and average profit-to-cash conversion of roughly 80%, and the company plans to hold a Capital Markets Day before the deal closes to detail its standalone strategy. The transaction requires regulatory approval and is not subject to shareholder approval under U.K. Listing Rules.
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