July 6 (UPI) — Britain’s ITV public broadcast television network and Sky said Monday they had reached a deal for Comcast-owned Sky to take over ITV’s media and entertainment businesses for as much as $2.1 billion, pending the approval of regulators.

The merger, following eight months of negotiations, will combine the strengths of both groups in a single competitor with the capacity to take on the “global streaming giants” and YouTube in the British market, said the companies.

The deal includes British broadcaster’s four free-to-air channels but not its in-house content production hub, ITV Studios, maker of shows such as I’m a Celebrity Get Me Out of Here and Mr Bates Vs The Post Office.

However, the new company has agreed to enter into a $2.8 billion commitment for ITV Studios to supply content from 2028 through 2032, which Sky said was aimed at “supporting British programming, production and creative jobs across the United Kingdom.”

ITV Studios will then be spun off as a separate, publicly-traded “pure-play global content business” on the London Stock Exchange.

Sky said the two networks’ news operations, ITV News and Sky News, would retain “their distinctive editorial voices,” but it was unclear what consolidation or pooling of resources there would be.

Sky group CEO Dana Strong said only a “minority” of the $267 million savings the tie-up would deliver over three years would come from shedding staff where there was duplication, “primarily in corporate and commercial functions,” with the bulk from efficiencies in marketing and tech and foreign content costs.

Comcast is in the process of moving Sky’s Europe operation into its NBCUniversal portfolio as part of Comcast’s split into distinct media and technology companies, expected to be complete in summer 2027.

ITV shareholders could expect to receive about 33 cents a share, around $1.3 billion in total, from the deal, according to the board of ITV, while another $87 million will benefit the broadcasters’ employee pension scheme.

Sky said the deal was an opportunity to forge a “U.K.-focused national streaming champion” to compete for eyeballs with U.S. streaming platforms such as Netflix and Amazon Prime Video, as well as Google’s YouTube.

“Bringing Sky and ITV Media & Entertainment together combines the very best of free-to-air television, pay TV and streaming, ensuring viewers across the U.K. continue to enjoy outstanding British programming in a rapidly changing world. ITV will remain a public service broadcaster at the heart of British life, and we’re excited about the future we can build together,” said Strong.

ITV chairman Andrew Cosslett said the merger was the correct response to the rapid changes taking place within the industry.

“It is right that we now secure ITV’s crucial role as a public service broadcaster,” said Cosslett, adding that the new business would “create a U.K. champion with the scale and resources to better compete with global streaming platforms,” he said.

One of the largest ever deals in British media, the takeover of the broadcaster with the highest ratings brings Sky the scale afforded by millions of additional viewers.

Sir Peter Bazalgette, chairman of ITV from 2016 through 2022 and a shareholder, told the BBC the deal was existential.

“If we don’t see consolidation between domestic broadcasters, we won’t have any in 20 years’ time and it’s the same for all the European countries because of the competition from the streamers. It’s a good deal for viewers because it sustains, will sustain, ITV’s investment — as its obligations are as a public service broadcaster — in international news, national news, regional news and all the programs that its viewers love”, he said.

The market watchdog, the Competition and Markets Authority, and Ofcom, the telecoms watchdog, are both likely to be very interested in taking a close look at the deal with Ofcom focusing on an existing TV news channel acquiring half of ITV’s stake in ITN, a news production operation which makes news programming for ITV and two other free-to-air channels.

The CMA will be interested in the impact on the market and whether it would produce a “substantial lessening of competition,” with particular regard to advertising.

The government could also block the deal under the Enterprise Act, which gives it powers to intervene “where wider public interests must be considered, including plurality of media ownership, and the need for a wide range of high-quality broadcasting.”

Sky will have to pay ITV a $107 million fee if the deal is derailed by regulatory issues.

ITV, Britain’s oldest commercial broadcaster, has remained independent since going out on the air for the first time in September 1955.