ITV (LSE:ITV) has agreed to sell its Media and Entertainment business to Sky, a wholly owned subsidiary of Comcast, for total consideration of up to £1.6 billion, in a transaction that will fundamentally reshape the British broadcaster.
The deal comprises £1.2 billion in initial cash, the contribution of Sky's Love Productions business at an agreed enterprise value of £200 million, and a contingent cash payment of up to £200 million payable in the second half of 2028 if ITV's total advertising revenue exceeds £1.7 billion in full-year 2027.
Following completion, ITV Studios will emerge as a separately listed, pure-play global content producer, anchored by a long-term content supply agreement with ITV M&E and Sky carrying a minimum spend commitment of £2.1 billion over 2028 to 2032.
Love Productions, the maker of the Great British Bake Off, adds roughly £75 million in revenue and £24 million in EBITDA and is intended to broadly offset approximately £25 million of annual stranded costs ITV Studios will carry post-separation.
The transaction implies an acquisition multiple of approximately 5.6 to 6.4 times ITV M&E's 2025 EBITDA, which ITV said was in line with precedent sector deals.
"Sky will be a strong and responsible custodian of ITV M&E," chief executive Carolyn McCall said, adding that the deal reflects "the successful execution of our strategy."
On current trading, ITV said its full-year expectations are unchanged and that it expects total advertising revenue to be up approximately 8% in the second quarter, with full third-quarter guidance to be provided at interim results.
Completion is expected in the second half of 2027, subject to regulatory approvals including CMA review, with total transaction and separation costs estimated at approximately £185 million.
