Britain's biggest commercial TV group Granada today agreed a £1 billion sterling (€1.58 billion) takeover of rival Carlton, opening a new front in the ratings war with the BBC and Rupert Murdoch's BSkyB.
The move may pave the way for a fully consolidated ITV network, valued at £2.6 billion sterling (€4.1 billion).
Under the agreement, Granada shareholders will own 68 per cent of the merged group and receive £200 million in cash. Carlton's shareholders will take a 32 per cent stake.
Granada said today that the merger should generate around £35 million of cost savings per annum by the end of the first year.
The merger of the major stakeholders in the ITV network will create a dominant force in British mainstream commercial television at a time of falling audiences and advertising revenues.
Granada and Carlton Communications have held talks before but never clinched a deal due to regulatory concerns that a full merger could give them too much power over the prices they charge advertisers.
"For shareholders, this deal offers fair value now and the opportunity to benefit from increased efficiencies from a strengthened and more focused ITV," said Granada Chairman Mr Charles Allen, who will be chief executive of the new group.
PA