Granada and Carlton in merger talks

Granada and Carlton have revealed plans to merge, paving the way to a consolidated ITV.

Under the terms of the deal, Granada shareholders will have a 68% stake in the new company and £200m (€316m) of cash on completion.

Carlton shareholders will have a 32% stake, potentially increasing to 34% in 2006.

Michael Green will become Chairman of the merged group and Charles Allen will be chief executive.

In addition three non-executive directors from each company will join the board of the merged group.

However, the companies cautioned: "There can be no assurance that final agreement will be reached.

"A further announcement will be made in due course."