ITV and RedBird IMI are in early talks to merge their production businesses, sources say. The merger would create one of Europe’s largest production groups. ITV shares rose 3.4% following reports of the merger talks.
The potential deal is a strategic move to consolidate and strengthen their market positions in the competitive entertainment production industry. ITV is negotiating with RedBird IMI, which controls the sale of the Telegraph titles, to potentially combine ITV’s Studios arm with All3Media, the production company behind shows such as “The Traitors.”
ITV had previously considered purchasing All3Media in 2023, deeming it a strategic fit for its Studios division. However, ITV was outbid by another entity that completed a £1.15 billion acquisition of All3Media.
RedBird IMI is led by a former CNN executive and is supported by Sheikh Mansour bin Zayed Al Nahyan of the United Arab Emirates royal family. One proposal under consideration is for ITV to separate its broadcast business and merge its Studios division with All3Media. Both RedBird IMI and ITV would hold stakes in the new entity.
Itv, RedBird IMI merger discussions
The agreement would create one of the largest production companies in Europe, with a combined revenue of just over £3 billion based on 2023 figures. RedBird IMI has reportedly received interest from various parties for a potential collaboration with All3Media.
ITV’s chief executive, Dame Carolyn McCall, is under pressure to boost the free-to-air broadcaster’s share price and unlock value from its Studios business, which analysts consider a key asset. There has also been speculation about a potential bid for ITV, with private equity firm CVC Capital being mentioned as a possible suitor. ITV has faced a slowdown in advertising over the past two years due to declining economic confidence.
Although total advertising revenue grew by 6% in the first nine months of the year, driven by digital spending, this was offset by a decline in studios revenue due to the Hollywood actors’ and writers’ strike. McCall announced that the company was on track to achieve an additional £20 million in cost savings this year, on top of the £40 million already planned, in an effort to improve profitability. ITV is set to report its full-year results on March 6.
The shares closed ¼p, or 0.4%, higher at 74¼p, but have more than halved in value since McCall became ITV’s first female chief executive in 2018.