Sky agrees terms to buy ITV’s broadcast and streaming unit

The agreement will also see ITV, which will keep its production and distribution division ITV Studios, acquire The ​Great British Bake Off producer, Love Productions, from Sky. ITV Studios makes shows including Love Island and Squid Game: The Challenge.

Reuters reported that the £1.6bn deal had moved in a positive direction in the last week ​and was now being finalised by lawyers. It could be announced in the next fortnight.

News of the acquisition talks first emerged late last year. In May, ITV followed up by saying it remained in “active discussions” with Sky.

Sky is owned by US media giant Comcast. The deal will require approval from Ofcom and the Competition Markets Authority.

Already there are question marks over what will happen to Sky and ITV’s respective news operations. ITV News is run by Channel 4 and 5 news provider ITN.

The tie-up between Sky and ITV is seen as a way to create a top-three UK streamer to compete with global players such as Netflix, YouTube, Amazon Prime Video and Disney+. It would bring together ITVX and Now TV.

ITV’s most recent Q1 trading showed revenue at ITV’s Media and Entertainment unit declined slightly to £477m, while ITV Studios grew 4% to £400m.