Go-ahead for ITV merger

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The Independent Online

Broadcasters Granada and Carlton were today given approval to merge in a £4 billion deal that effectively creates a single ITV network.

The two media giants, which together hold franchises in 12 of the network's 15 regions, were given clearance by Trade and Industry Secretary Patricia Hewitt following a lengthy investigation by the Competition Commission.

However, the Commission ruled that the pair must agree to conditions, including "behavioural" remedies over pricing for advertising.

Ms Hewitt added that Carlton and Granada also needed to agree to a package of measures to safeguard other Channel 3 licensees.

She said: "Subject to suitable undertakings being offered by Carlton and Granada so that the merger can go ahead, I am confident that the merged company will be able to compete more effectively with the BBC, Channels 4 and 5, and BSkyB."

There had been fears that the pair would be forced to sell their sales houses in order to allay fears a merged broadcaster would have too much power. The two companies currently hold around 52% of the television advertising market.

But selling off the two advertising houses would have cut the estimated £55 million annual cost savings from the merger by as much as £20 million.

Under the proposed tie-up, Granada would take a 68% stake in the new dominant ITV company and leave it better placed to take on the might of satellite broadcaster BSkyB and the BBC.

Granada owns seven ITV franchises including Granada Television, London Weekend Television, Yorkshire Television, Tyne Tees Television, Anglia Television, Meridian Broadcasting and Border Television.

Carlton Television owns the licence in five regions - London & LNN, Central, West Country, HTV West and HTV Wales. Its content division has made programmes including Inspector Morse and Survivor.

Granada and Carlton announced their intention to merge last October before the Office of Fair Trading referred the matter to the Competition Commission in March. A 456-page report on the merger has been with Ms Hewitt since August.

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