LONDON: ITV plc has reached an agreement to sell its Media and Entertainment business to Sky for a total consideration of up to £1.6 billion, the company announced Monday. The transaction, expected to complete in the second half of 2027, will unlock significant value for shareholders and establish ITV Studios as a standalone pure-play global content business.
The deal includes an initial cash consideration of £1.2 billion at completion, the contribution of Sky’s Love Productions business valued at £200 million, and contingent cash consideration of up to £200 million payable in the second half of 2028, subject to total advertising revenue performance in fiscal year 2027.
Shareholders to Receive £950 Million Return
The transaction enables a significant cash return to ITV shareholders of approximately £950 million, or 25 pence per share, excluding any contingent consideration. After transaction and separation costs of approximately £185 million, or £155 million net of tax, net cash proceeds are expected to be about £1.05 billion.
Proceeds will first be used to deleverage ITV Studios to approximately 1.5 times net debt to EBITDA post-completion. The remaining £65 million will be placed into escrow for the benefit of the ITV Pension Scheme.
“The sale of ITV’s M&E division will deliver a significant cash return to shareholders,” said Andrew Cosslett, chairman of ITV. “Crucially, the transaction also unlocks the value of ITV Studios, which post completion will be a distinctive pure-play global content business with a strong track record of success and excellent prospects.”
Long-Term Partnership Secures ITV’s Public Service Broadcasting Commitments
ITV Studios will enter into a long-term Content Supply Agreement with ITV M&E and Sky, covering key programmes such as “Coronation Street,” “Emmerdale,” “Love Island” and “I’m a Celebrity…Get Me Out of Here!” The agreement includes a minimum spend commitment of £2.1 billion over 2028-2032, providing significant revenue visibility.
Sky has pledged to continue delivering ITV’s Public Service Broadcasting licences until their expiry in 2034, safeguarding all obligations including nations, regional and national news. Viewers’ favorite shows will remain freely available, and ITV’s PSB commitments are protected under the terms of the Channel 3 Licenses that Sky is acquiring.
“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,” said Carolyn McCall, chief executive officer of ITV. “This transaction builds on that momentum to deliver clear, tangible value for shareholders.”
Following Comcast’s planned separation, Sky and ITV M&E are expected to form part of NBCUniversal upon completion of both transactions. The combination of ITV M&E and Sky creates a scaled UK media and entertainment company with resources to better compete with global streaming platforms.
“I am confident that Sky will be a strong and responsible custodian of ITV M&E,” McCall added.
The Board has approved the transaction and believes the terms are in the best interests of ITV and its shareholders. The transaction is subject to regulatory approvals and other customary conditions and does not require shareholder approval under UK Listing Rules. Evercore and Morgan Stanley are acting as lead financial advisers to ITV, with Goldman Sachs also serving as financial adviser and corporate broker.
