ITV Studios and Abu Dhabi Fund Explore £3bn Pound Production Merger Deal

British broadcaster ITV has initiated preliminary discussions with Emirati-backed RedBird IMI regarding a potential merger of their respective television production enterprises, signalling a major shift in the European media landscape.

The proposed deal centres on combining ITV Studios, responsible for hit shows like Love Island and The Voice, with All3Media, the production powerhouse behind The Traitors. The merger could create a £3 billion media giant, establishing one of Europe’s largest content production entities based on 2023 revenue figures.

The talks emerge as ITV’s chief executive Dame Carolyn McCall faces mounting pressure to revitalise the broadcaster’s share price and extract maximum value from its Studios division, widely regarded by industry analysts as the company’s crown jewel. The discussions follow ITV’s previous unsuccessful bid to acquire All3Media in 2023, which ultimately went to RedBird IMI in a £1.15 billion deal.

RedBird IMI, led by former CNN executive Jeff Zucker and backed by UAE royal family member Sheikh Mansour bin Zayed Al Nahyan, is exploring various structural options. One possibility involves ITV separating its broadcast operations and merging Studios with All3Media, resulting in a shared ownership arrangement between both parties.

The timing is particularly significant as ITV grapples with advertising market challenges. Despite a 6 per cent growth in total advertising revenue during the first nine months of 2023, the Studios division has experienced setbacks due to Hollywood labour disputes. The company plans to implement £60 million in cost savings as it prepares to release full-year results on 6 March.

ITV’s share price, which closed at 74¼p, reflects a decline of more than 50 per cent since McCall’s appointment in 2018. The merger discussions coincide with persistent speculation about potential takeover bids for ITV, with private equity firm CVC Capital mentioned as a possible suitor.