LONDON (Reuters) - ITV (L:ITV), Britain's biggest free-to-air commercial broadcaster, has agreed to buy the TV business of Northern Irish network partner UTV (L:UTV) for 100 million pounds in cash, it said on Monday.
The deal will put 13 of 15 so-called channel 3 licences in the hands of ITV, and the company said the combined business would benefit from ITV's investment in content, its advertising sales team and broadcast infrastructure.
UTV will retain its radio businesses UTV Radio GB and UTV Radio Ireland, and its digital media businesses, Simply Zesty and Tibus Digital, ITV said.
Shares in UTV rose 4.6 percent to a five-month high of 181.5 pence after the announcement, which has been widely anticipated since UTV said it was in talks in August.
Shares in ITV, whose hit shows include soap opera "Coronation Street" and drama "Downton Abbey", were down 0.5 percent at 247.6 pence in a flat market (FTSE).
Analysts at Citi said ITV was paying above the average transaction multiples for a broadcast business for UTV, which made a loss of 3.3 million pounds in the first half after it launched a new channel serving the Irish republic.
They said cost synergies, however, would make the deal broadly neutral for ITV's earnings per share in the first year.
After the deal, only the two channel 3 licences in Scotland owned by STV (L:STVG) will remain outside ITV's control.
Analysts at Liberum said they did not think a final deal to unify the network was likely.
"We do not think ITV will make a bid for STV due to the political sensitivities of Scotland's main commercial broadcaster being owned by London-based ITV Plc," they said.