ITV giants agree merger

Broadcasters Granada and Carlton have agreed to merge in a deal that paves the way for a single ITV company.

Granada is one of the shareholders in TV3.

The two organisations said viewers would benefit from increased investment in programming while advertisers would be able to reach higher audiences.

Carlton chairman Michael Green is to chair the combined group while Granada boss Charles Allen will take up the post of chief executive.

Mr Allen said: "This deal means that viewers will see more high quality, original drama, more film premieres and more entertainment events on ITV than ever before.''

He added: “We will work with our advertisers to use the full power of ITV to drive their brands and businesses.

“For shareholders, this deal offers fair value now and the opportunity to benefit from increased efficiencies from a strengthened and more focused ITV.”

Today's statement provides greater detail to the deal announced in principle between Granada and Carlton last Friday.

Under the tie-up Granada shareholders will own 68% of the merged group and receive £200m (€316.5m) in cash. Carlton’s shareholders will take a 32% stake.

Granada said today that a tie-up should generate around £35m (€55.3m) of cost savings per annum by the end of the first year.

These were most likely to come from “duplicated infrastructure and administration in broadcasting, content and central services”.

Granada said that, based on closing share prices of both broadcasters on Friday, the combined group would have a market value of £2.6bn (€4.1bn).

The merger is conditional on clearance from both the competition authorities and the UK Independent Television Commission.

Granada confirmed the two companies were willing talk about keeping their respective sales houses separate to address some of the concerns.

Mr Green said: “One ITV has been a vision long in the making.

“One company, one management and one focus can now set its sights firmly on beating the opposition and giving viewers and advertisers what they want.

“I want this merger to mean great television programmes and the strongest possible schedule. We must make sure that it does just that.”

Analysts before the weekend stressed that a merger between the two could still be blocked by competition concerns.

The Government’s proposed Communications Bill, expected to lift restrictions on the creation of a single ITV, is still more than a year away.

Granada owns seven ITV regional licences – Granada TV, LWT, Yorkshire TV, Tyne Tees TV, Meridian Broadcasting, Anglia TV and Border.

Carlton owns the ITV licence in five regions – London & LNN, Central, West Country, HTV West and HTV Wales.

Only three licences remain outside the two group’s reach, Grampian, Scottish and Ulster TV.