LONDON - ITV has taken control of breakfast television station GMTV, paying £31m for SMG's 25% stake in the channel, and is now obliged to bid for the remaining 25% that is owned by US media giant Walt Disney.
News of the deal first came on May 10 this year, but has only just been given the regulatory go-ahead.
With 75% of GMTV now in its hands, ITV is obliged to make an offer at the same price to Walt Disney, which had already indicated that it was prepared to sell up.
SMG, which as well as the two Scottish ITV licences also owns Virgin Radio, originally bought a 20% shareholding in GMTV in 1991 and increased this to 25% in 2000. However, it now says that since the Carlton/Granada merger gave ITV 50% of the station, its board takes the view that the investment is no longer strategic.
Charles Allen, CEO of ITV, said: "GMTV is an excellent business and in 2003 grew its share of viewing. ITV's acquisition of an increased stake in GMTV at a fair price has simplified the ownership structure and will enable ITV and GMTV to work even more closely together."
SMG's 25% stake is part of a wider commercial agreement that also sees ITV take control of the Scottish broadcaster's airtime sales on SMG's Scottish Television and Grampian Television licences.
Other parts of the deal include the rights to use the ITV name for the ITV corporate identity. SMG and ITV had been at loggerheads over Carlton and Granada appropriating the ITV name when they merged last year.
Andrew Flanagan, chief executive of SMG, said: "The ITV name has significant value to all ITV franchise holders and is synonymous with high-quality British television. I'm pleased that we have reached this agreement with ITV plc, which clarifies the use of the ITV brand by Scottish TV, Grampian TV and ITV plc."
The two have also agreed the cross-promotion of ITV2 and the ITV News Channel on Scottish Television and Grampian Television.
Allen said the move was another step in delivering the strategy to develop further the single ITV business.
"We have reached agreement with SMG on a number of points confirming the operation of the ITV Network, the digital transmission in Scotland of ITV channels including ITV2 and ITV News Channel and the sale of all SMG's national television airtime through our single ITV sales house," he said.
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