Two people with knowledge of the situation told Reuters that British broadcaster ITV is holding early-stage talks with Abu Dhabi-backed group RedBird IMI about a possible merger of their respective production businesses. The discussions have centered around merging ITV's Studios business with All3Media, the producer of the hit TV show "The Traitors," which RedBird IMI acquired for 1.15 billion pounds($1.43 billion) last year.
One option is for ITV to separate its broadcast business and merge Studios with All3Media, with RedBird IMI and ITV holding stakes in the new studio entity. Speaking anonymously because the matter is private, the sources said the talks were at an early stage and may not lead to any transaction. A merger between All3Media and ITV Studios would create one of the largest production groups in Europe, with revenue of around 3.176 billion pounds ($3.95 billion) based on 2023 numbers published by the companies, alongside rivals Banijay, BBC Studios and Fremantle.
ITV shares rose 3.4% after the Reuters report of the talks. The talks come after RedBird IMI said it would sell Britain's Telegraph newspaper group, which it effectively owns but cannot control in the long term because Britain said it would stop foreign governments from owning newspapers. ITV explored a deal in 2023 to buy All3Media from its then joint owners Liberty Global, opens a new tab, and Warner Bros Discovery opened a new tab to combine it with its Studios unit, Reuters reported at the time.
RedBird IMI, led by former CNN executive Jeff Zucker and backed by Emirati royal Sheikh Mansour bin Zayed Al Nahyan, went on to buy All3Media last year. The talks with ITV failed when the two sides could not agree on terms. ITV said it weighed M&A opportunities against "strict financial criteria." Liberty Global's 50% stake in All3Media and around 10% holding in ITV were a factor in previous deal talks.
ITV's chief executive Carolyn McCall said in July 2023 that ITV looked at All3Media with great interest because it was "bang on strategy," but it was not the right deal. McCall has been considering options for the group amid a languishing share price. Other private equity funds had held conversations with ITV about its Studios unit in recent months. According to LSEG data, shares in ITV have roughly halved to 71 pence since January 2018, when McCall took over. As of Wednesday's close, the company had a market value of 2.7 billion pounds. ITV, the maker of "Love Island" and "The Voice," has an ad-funded broadcast and streaming business as well as Studios. Worries over advertising, the decline in linear TV audiences, and the investment requirements in streaming have prompted analysts to suggest that splitting the company would boost its value.
Production companies have also been pressured by reductions in budgets from ad-funded broadcasters and a drop in commissions from some streamers. Studio groups, including RTL's Freemantle, have explored options to cut costs and pool resources, Reuters has reported.