Media giants in £7.8bn merger

Two of Britain's biggest media companies, United News and Media and Carlton Communications, have agreed a £7.8 billion merger, it was announced today.

Two of Britain's biggest media companies, United News and Media and Carlton Communications, have agreed a £7.8 billion merger, it was announced today.

The deal will create Britain's largest commercial broadcasting group, with six ITV franchises covering about 65% of all the UK's households.

The enlarged group will also own the Express group of newspapers, including the Daily and Sunday Express and the Daily Star.

The merged group will also own half of the digital terrestrial broadcaster ONdigital, which is currently a joint venture between Carlton and Granada Group.

Other TV interests will include 20% of GMTV, 29% of Channel 5 and 40% of the TV news organisation ITN.

Its operations will also take in the Miller Freeman business publishing company, and United's Internet service provider business Line One.

Carlton chairman Michael Green will become chairman of the merged group, while the chief executive will be Lord Hollick, who holds the same post at United News and Media.

Lord Hollick said: "The choice is straightforward - we can wait for the future to arrive or start to shape it today. We plan to invest aggressively in our on-line business to exploit the huge potential of the new media revolution."

The new group's television interests will include Carlton's London and Midlands ITV franchises, with United's Meridian, Anglia, HTV and WestCountry television operations.

The group said it expected to make savings of £40 million from the merger, mainly from bringing together its TV interests.

The merger of the two media groups will involve a exchange of shares, with United News and Media offering 0.759 shares for each Carlton share.

After the merger the group will sell off some divisions, including the Technicolor film business and some Miller Freeman titles.

Based on the latest financial results for the two companies, the merged group will have a total turnover of £3.97 billion, with operating profits of £505.5 million.