Carlton, Granada in Advanced Merger Talks

11 October 2002

Carlton Communications and Granada Media announced early today (Friday) they are in advanced merger negotiations – a move long expected and urged by investors since the failure earlier this year of similar discussions.

The current talks are driven by the downturn in advertising revenues and ITV's sliding ratings in the face of a full frontal assault by the now commercially aggressive BBC – and the erosion of market share by satellite and cable broadcasters in an increasingly fragmented market.

It is believed that Granada would be the senior partner, holding around 33% of the shares, although it was not revealed what percentage Carlton and other investors might take.

In the event that a merger is inked, Granada chairman Charles Allen will become chief executive of the combined entity with Carlton founder and chairman Michael Green as chairman – a role which observers believe would have more symbolic than executive significance.

Says Green: “A single ITV is within sight. In a rapidly changing broadcast industry we need to combine to compete effectively. Delay is not in the interest of viewers, advertisers, stakeholders or the future of British broadcasting.”

Data sourced from: BBC Online Business News (UK); additional content by WARC staff