Belfast based media group UTV plans to sell its television assets, including its subsidiary UTV Ireland, to ITV plc for £100 million (€136m).
Following the sale, UTV will focus its radio interests, which include TalkSport and six stations in the Republic, as well as its digital media businesses.
As ITV is also acquiring the UTV brand, the Belfast-based parent company of the remaining radio and digital interests will adopt a new name, once shareholders approve the deal in November and various regulators also sign off.
The deal is expected to take some months to complete.
UTV Media is based in Havelock House on Belfast’s Ormeau Road and this building, as it belongs to the television division and houses two studios, will transfer to ITV.
Under the terms of the agreement with ITV, some 70 staff employed in group, digital and radio operations in Belfast can remain on the site for up to a year after the deal is completed.
The television division, UTV Limited, employs 143 staff in Northern Ireland and 106 in UTV Ireland, which is based in the Dublin Docklands.
ITV chief executive Adam Crozier said ITV intended to strengthen the struggling UTV Ireland, “with high-quality ITV programming at its core”.
Industry sources have predicted that ITV may decide to shut down local production in favour of what is known as the opt-out model, under which it would simply sell advertising in the Republic's market on the back of its rights to popular programmes such as Coronation Street and Emmerdale.
It is not a requirement of the type of licence that UTV Ireland holds to operate a news service. However, the channel’s spot on the Saorview platform was approved by the Minister for Communications on the basis that it had “public service character”.
In the year to December 31st 2014, UTV’s television division had revenues of £34.7 million. However, the set-up of UTV Ireland has been costly and lower-than-expected advertising revenues have prompted a number of profit warnings.
The group’s first-half results showed that the television division generated an operating loss of £3.3 million, down from a profit of £4.4 million in the first-half of 2014. For 2015 as a whole, UTV Ireland is expected to post a loss of £11.5 million.
UTV Media chief executive John McCann said "becoming part of the ITV family" was "by far the best way to take UTV's television business forward", while chairman Richard Huntingford observed that the global television industry has been in a throes of consolidation.
“Having successfully extended the reach of our television business with the launch of UTV Ireland, I believe that shareholder value can be maximised through our television interests becoming part of ITV’s global broadcast and content business,” Mr Huntingford said.
Mr Huntingford added that he believed the price reflected the value of the division. “ ITV will be a good owner of the business and, with its scale and reach, will be able to accelerate the future growth of the business.”
As part of the sale, the UTV pension scheme move to ITV, which has agreed to pay deficit funding contributions of £640,000 per year for seven years.
ITV, a FTSE 100-listed company, is Britain’s biggest free-to-air commercial broadcaster. It now owns 13 of the 15 “Channel 3” television licences in the UK, with the remaining two held by Scottish group STV.
“UTV Television’s strategic objectives are closely aligned with our own and we are very pleased that they are joining the ITV family,” Mr Crozier said.
