Speaking at a House of Lords communications committee meeting, Smith revealed the planned joint venture could, if formed in the manner planned, deliver savings of up to £100m. Channel 4 and BBC Worldwide would each take a 50% stake in the venture.
He revealed the venture would include BBC Worldwide's non-branded UK assets, chiefly its TV assets, including its 50% stake in the UKTV business and its 60% stake in DVD business 2Entertain. It is expected Channel 4 would fold in its digital TV channels and other related businesses as well.
He added that the planned joint venture could be open to moving to full ownership of both UKTV and 2Entertain. He said: "The other partners want to sell their stakes and processes are underway about the on-sale of these other percentages in these ventures."
Smith said BBC Worldwide and Channel 4 are potentially only weeks away from announcing details of the venture, although he said government support is needed for it to become reality.
"We have been negotiating pretty well and we are at the point where we know the size, the shape and nature of the venture. We are agreed on all the things that matter about it, with one or two exceptions that we are still debating.
"Crucially, if it is to be enacted, it does require a degree of government support. We do not yet know what the Government view is about this proposal as opposed to other proposals on the future of Channel 4."
When pressed by committee chair Lord Fowler, Smith said he has not taken part in discussions over a full merger between Channel 4 and BBC Worldwide, pointing out instead that only a joint venture of some of the companies' businesses is on the table.
"There's been talk of merger, but I have not participated in a single discussion about this." He added: "I, personally, believe the best ventures are formed when two organisations are going to get something out of it."
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