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The BBC's Greg Wood
"Britain is experiencing a TV explosion"
 real 28k

Julian Buck, Barclays Stockbrokers
"Meridian was one of the jewels in the crown"
 real 28k

Friday, 21 July, 2000, 10:26 GMT 11:26 UK
ITV giants ditch merger plans

UK television companies Carlton Communications and United News & Media have called off their merger plans, leaving both firms open to a take-over bid from rival Granada.

ITV franchises - who owns what
Granada:
Granada, LWT, Yorkshire, Tyne Tees

Carlton:
Carlton London, Carlton Central, West Country

United:
Anglia, Meridian, HTV
The merger would have created Britain's largest commercial television group.

The government had approved the merger plans, but on the condition that the group would sell one of its key television franchises, Meridian, within six months.

In a joint statement, Carlton and United said "the requirement to dispose of Meridian ... undermined the strategic rationale behind the merger and significantly reduces the benefits to shareholders".

The two companies had surprised the UK television industry, when they announced their 8bn merger deal in November 1999.

Rival Granada then tried to block the deal by expressing its interest in taking over either of the two.

Vulnerable

When the government approved the merger of Carlton and United a week ago, it also cleared Granada's plans to take over either of its rivals.

The collapse of the merger plans clears the way for Granada to pick its target, and could leave the other firm vulnerable for a take-over as well.


The company intends to pursue discussions with interested parties

United News & Media
European media giant RTL is reportedly ready to move into the fray. The recently restructured group combines the television assets of Britain's Pearson, Germany's Bertelsmann's and Belgium's Audiofina's.

United News & Media has already put up its name for sale. As the collapse of the Carlton deal was announced, the company said there was "significant value to be generated from the consolidation of UK television ownership".

"The company intends to pursue discussions with interested parties to establish how this value can be captured for its shareholders", it added.

Talks with "a number of parties about a wide range of transactions" are already under way, according to Bernard Gray, United's director of group strategy.

Industry analysts assume that United could sell off individual parts of its media empire, including its Channel 5 stake.

On the London Stock Exchange, United News & Media's share price surged 22 pence to 968p.

Carlton meanwhile suffered a drop of 20p to 800p, before recovering slightly.

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See also:

18 Jul 00 | Business
ITV: What next?
11 Jul 00 | Business
Granada raises 1.3bn warchest
14 Jul 00 | Business
ITV braced for power struggle
16 Jul 00 | Business
RTL may enter ITV fray
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