Britain’s ITV said today it is in preliminary talks with Comcast-owned pay-TV company Sky over a £1.6 billion sale of its media and entertainment division, sparking a sharp rise in the broadcaster’s shares.

ITV’s M&E, comprising its free-to-air channels and ITVX streaming platform, has been hit by ad market weakness.

Combining M&E with Sky would create bigger scale in streaming to compete with global players such as Netflix, Amazon and Disney, a person close to the talks said, adding the two groups also had a deep understanding of British audiences across sport, entertainment, drama and news.

Shares in ITV, which have traded around the levels they were 13 years ago, were up 15% to 78 pence today.

Analysts at UBS said the deal would require regulatory approval given it would mean the UK’s largest commercial public broadcaster being owned by a non-UK company and because Comcast already owns Sky, Britain’s largest pay-TV group.

ITV’s total market capitalisation was £2.53 billion yesterday, the day before the talks, which were first reported by Bloomberg, became public. The price tag being discussed includes debt, ITV said in a statement.

ITV also owns a Studios production business, which makes shows including “Coronation Street” for its own channels and dramas for broadcasters including the BBC, Netflix and Apple TV.

ITV said there was no certainty about terms or whether a deal would be agreed.

Sky declined to comment.

ITV had warned this week that its ad revenue would be 9% lower in the last quarter of 2025, reflecting pullback by advertisers who are concerned about the macro-economic environment in Britain.

The group has focused on investing in its Studios business and its streaming platform to offset advertising volatility in linear broadcasting, where audiences are shrinking.

ITV has long been subject to takeover speculation, with a focus in recent years on its Studios.

Carolyn McCall, ITV CEO since 2018, said in July that there were frequent industry conversations over potential deals.

“This whole sector, everyone talks to everyone, and everyone is talking to everyone. And you know that the board will keep all options under review,” she said.

Reuters reported earlier this year that ITV held early-stage talks with Abu Dhabi-backed group RedBird IMI about a possible merger of their respective production businesses.

French media group Banijay was also reported to have held discussions about a possible offer for ITV’s Studios business or a full takeover.

The M&E division made revenue of £955m and adjusted earnings before interest, tax and amortisation of £35m in the six months to the end of June, ITV said in July.