In an announcement this morning the two said the new company would be one of the leading commercial broadcasters in Europe and the largest commercial TV production company in Britain.
Last week the two ended months of speculation about the future of ITV with news of the merger, which will see Granada shareholders taking the majority stake in the merged group with 68% of shares and £200m on completion of the deal. Carlton shareholders will take the remaining 32% stake.
The merged company be will be led by Carlton chairman Michael Green and Granada chairman Charles Allen, who take on the roles of chairman and chief executive respectively.
This morning the two promised that advertisers will benefit from the greater ability of the merged group to invest in programming, leading to improved audience share and commercial impacts – particularly among the key demographic groups.
According to Green: "One ITV has been a vision long in the making. One company, with one management and one focus can now set its sights firmly on beating the opposition and giving viewers and advertisers what they want. I want this merger to mean great television programmes and the strongest possible schedule. We must make sure that it does just that."
The two said that the merger remains conditional on winning clearance by the competition authorities and the ITC. If regulatory clearances are obtained sufficiently in advance of the Communications Act coming into force, it is intended that the merger will go ahead in two stages.
The first stage will be an interim structure complying with current broadcasting legislation. This stage will see Carlton and Granada deal with the contentious issue of airtime sales and the two sales companies owned by the broadcasters.
These are likely to be kept separate to give the illusion at least of a competitive TV airtime market although there is no confirmation of this.
It's this issue that has caused most anxiety among advertisers and media agencies. The deal has also been attacked by Channel 4.
Carlton and Granada are promising that the merger will lead to cost savings of around £35m a year in duplicated infrastructure and administration in broadcasting, content and central services and a further £20m of savings is achievable on full merger. However, there will be a one off cost to achieve these benefits, estimated to be £40m.
Allen said: "This deal means that viewers will see more high quality, original drama, more film premieres and more entertainment events on ITV than ever before. Great programmes that attract mass audiences are key to driving ITV’s success. We’ll work in partnership with our advertisers to use the full power of ITV to drive their brands and businesses."
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