(RTTNews) – ITV plc (ITV.L), Britain’s commercial public service broadcaster, Monday announced that it has agreed to sell its Media & Entertainment business or ITV M&E to Sky, a Comcast Corp. (CMCSA) subsidiary, for a total consideration of up to 1.6 billion pounds.
Regarding the current trading, ITV said its expectations for the current year remain unchanged. Studios growth and margin are weighted towards the second half. For M&E, the company projects total advertising revenue to be up around 8% in the second quarter, and a strong July ahead. The company plans to provide third-quarter guidance at Interim Results.
The sale of ITV M&E follows Comcast’s decision to separate its media and technology businesses into two publicly traded companies. The company recently said it intends to spin off NBCUniversal and Sky into a standalone media and entertainment company.
ITV now said that following Comcast’s planned separation, Sky and ITV’s M&E business would form part of NBCUniversal upon completion of both transactions.
In the sale of ITV M&E, ITV will receive 1.2 billion pounds in cash at completion, plus Sky’s Love Productions for an agreed value of 200 million pounds. A further 200 million pounds is contingent on advertising revenue performance in 2027 and will be payable in the second half of fiscal 2028.
Net cash proceeds from the sale are expected at 1.05 billion pounds excluding the contingent payment, after transaction and separation costs of about 185 million pounds.
ITV plans to use the cash to reduce debt at ITV Studios, and then to return around 950 million pounds to shareholders, equivalent to 25 pence per share, and about 65 million pounds will be placed in escrow for the ITV Pension Scheme.
The deal will see ITV’s free-to-air channels, streaming service ITVX and other UK entertainment assets transfer to Sky. ITV will retain ITV Studios as a standalone global production and distribution business. Sky’s Love Productions, maker of The Great British Bake Off and The Piano, will join ITV Studios.
ITV’s board approved the deal and said terms are in shareholders’ best interests. The transaction requires regulatory approvals and is expected to close in the second half of fiscal 2027.
Post-sale, ITV Studios will operate as a pure-play content producer and distributor, and will keep rights to select shows under a long-term supply deal with the new Sky-owned M&E business.
The content agreement includes a minimum 2.1 billion pounds spend commitment for 2028-2032.
The combined entity will have a larger content budget and technology base to compete with global streaming platforms.
In the sale, Evercore and Morgan Stanley are lead financial advisers for ITV, Goldman Sachs is financial adviser, and Freshfields is legal adviser.
On the LSE, shares of ITV were gaining 1.22 percent, changing hands at 82.75 pence.
In pre market activity on Nasdaq, shares of Comcast were up 0.34 percent, changing hands at $23.87.
