LONDON - Comcast's Sky has agreed to acquire the broadcast channels and streaming service of Britain's ITV for £1.6 billion, or $2.13 billion. The deal, announced Monday, merges Britain's largest free-to-air commercial broadcaster with a leading pay-TV company.
The combined entity would control over 70 percent of the UK television advertising market. Sky CEO Dana Strong called the agreement a "defining moment" for British broadcasting. The merger will now face regulatory scrutiny.
The companies argue the combination is necessary to compete with global streaming giants like Netflix, Amazon, and Disney. The new company will reach more than 20 million households.
Under the agreement, ITV will become a standalone production business, creating content for the merged entity and other global streamers. ITV will receive £1.2 billion in cash and up to an additional £200 million based on advertising performance. The deal includes Love Productions, maker of "The Great British Bake Off."
The merged entity has committed to spending a minimum of £2.1 billion on content from 2028 to 2032. Shares in ITV traded slightly higher following the announcement. Sky, formerly linked to Rupert Murdoch's family, was sold to Comcast in 2018.