ITV has agreed to sell its media and entertainment operations to Sky in a £1.6bn transaction that the companies say will establish a powerful competitor to international streaming platforms.

The agreement covers ITV’s traditional broadcast channels as well as its ITVX streaming platform, with Sky chief executive Dana Strong describing the move as “a landmark moment for British media”.

The acquisition ranks among the largest deals ever seen in the UK media sector. Talks began in November last year, led by Comcast, the US-based parent company of Sky.

ITV Studios, the production arm behind hit programmes such as Love Island and I’m a Celebrity... Get Me Out of Here, is not part of the transaction.

In a statement, Sky Group said the British media industry is experiencing rapid and far-reaching change, with growing competition for viewers. It noted that greater scale is increasingly essential to compete effectively with global streaming services and digital platforms in the UK.

The company stressed that viewers should not expect immediate changes to their favourite programmes.

Audiences will still be able to watch well-known shows including Coronation Street, Emmerdale, Love Island, I’m a Celebrity... Get Me Out of Here!, This Morning, Loose Women, Lorraine and News at Ten, along with major live sporting events, Sky said.

Under the terms of its public service broadcasting licence, ITV must continue to provide a free-to-air service until at least 2034.

The takeover remains subject to regulatory approval. Once finalised, ITV Studios will operate as an independent company.

As part of the arrangement, ITV will receive £1.2bn in cash and acquire Sky’s Love Productions business, valued at £200m and known for producing The Great British Bake Off. ITV could also receive an additional £200m in 2028 if specified advertising revenue targets are achieved.

Sky has further committed to investing £2.1bn in content from ITV Studios over the next five years.

Susannah Streeter, chief investment strategist at Wealth Club, described the deal as an important milestone in the ongoing reshaping of Europe’s media industry.

She said traditional broadcasters are being forced to adapt quickly as audiences spread their attention across streaming services, social media and online video platforms, putting pressure on advertising income.

Streeter also cautioned that while cost efficiencies may be pursued, companies must ensure such measures do not undermine the creative expertise, editorial strength and institutional experience that have been central to the success of both organisations.