Introduction: Sky parent finalises £1.6bn acquisition of ITV broadcast operations

Happy Monday and good morning to those who stayed up late marking England's victory in Mexico.

To start the week: ITV has finalised the sale of its broadcasting and streaming operations to Sky for £1.6bn, a transaction set to form the United Kingdom's largest commercial broadcaster.

The anticipated agreement features a £1.2bn cash payment due after completion, plus Sky's Love Productions unit (producer of The Great British Bake Off) valued at an enterprise worth of £200m. Sky will add another £200m in cash if advertising goals are met during 2027.

ITV noted the transaction will distribute roughly £950m in cash to shareholders, equating to 25p per share.

The firms have also committed to at least £2.1bn in content spending from 2028 through 2032. Completion is projected for the latter half of next year.

ITV chair Andrew Cosslett said:

At a headline value of up to £1.6bn, the sale of ITV's M&E division will deliver a significant cash return to shareholders. Crucially, the transaction also unlocks the value of ITV Studios which post completion will be a distinctive pure-play global content business, with a strong track record of success and excellent prospects, further underpinned by a long-term partnership with ITV M&E and Sky.

Sky chief executive Dana Strong said:

This is a defining moment for British media and an opportunity to build a stronger future for two of the UK's most loved and trusted brands. We have huge respect for the transformation the ITV team has delivered, particularly its successful move into streaming through ITVX, which has brought fantastic British content to millions of viewers across the UK.
Bringing Sky and ITV Media & Entertainment together combines the very best of free-to-air television, pay TV and streaming, ensuring viewers across the UK continue to enjoy outstanding British programming in a rapidly changing world.
ITV will remain a public service broadcaster at the heart of British life, and we're excited about the future we can build together.

Meanwhile last night, the airline easyJet announced it plans to accept a £5.5bn takeover bid from US investment firm Castlelake that would take Britain's largest low-cost carrier private.

The companies revealed an agreement in principle on Sunday evening and sought an extension to a deadline for formal completion. The pact followed weeks of talks and multiple rejected proposals.

The agenda

9.30am BST: UK construction PMI
2.30pm and 3pm BST: US service PMI reports
3.30pm BST: Public Accounts Committee session - "Will £9bn lost to Covid fraud and error ever be recovered by the government?"
5.45pm: Catherine L Mann speaking on a panel at the Royal Economic Society 2026 conference 'Trusted, accessible and connected? The future of UK economic data', in Newcastle

Key events

38m ago UK new car registrations up 11% in June
1h ago EasyJet shares jump 10% after signalling intention to accept £5.5bn takeover offer
1h ago Ocado co-founder Tim Steiner to step down as CEO in 2028 amid succession debate
2h ago Introduction: Sky parent finalises £1.6bn acquisition of ITV broadcast operations

Elsewhere this morning, new data shows that German industrial orders rose by more than expected in May, up 1.9% compared with the previous month. Analysts had been expecting a rise of 1.5%.

Carsten Brzeski, global head of macro at the broker ING, said the rise suggested that parts of German industry are still benefiting from the re-channelling of international orders due to the war in the Middle East.

He said:

It sounds counterintuitive, but the conflict has provided a boost to parts of German manufacturing. The initial support came from stockpiling and more recently, some companies have benefited from Asian competitors being more exposed to disruptions affecting trade routes through the strait of Hormuz.
However, despite today's encouraging data, order books are recovering only gradually. After last year's rebound, mainly driven by strong demand in the defence industry, order books have been struggling to really gain more momentum this year. While industrial orders increased by more than 4% month-on-month between September and December last year, they were up by some 1% every month this year; at least when taking out the devastating January number (-11.5% month-on-month).
All in all, despite initial fears that the conflict in the Middle East would trigger new supply chain disruptions, German industry appears to have escaped with little more than a black eye.

UK new car registrations up 11% in June

New car registrations were up 11% in June in the UK compared with last year, according to preliminary figures from the Society of Motor Manufacturers and Traders (SMMT).

Battery electric cars made up for about 30% of the market, it found.

Ian Plummer, chief customer officer of Autotrader, said:

Battery electrics are now taking a third of the new car market, driven by intensifying competition and rising consumer interest in plug-in cars. New entrant brands are dominating in the hybrid category and serious players in electric vehicles as well, forcing established manufacturers to respond by sharpening pricing and accelerating innovation. That should help lower the cost of switching and tempt more buyers into the new car market.
That said, it's clear the wider context remains fragile, with ongoing uncertainty around policy, incentives and wider external pressures. Whoever is leading the next government needs to prioritise consistency and clarity to maintain car buyer confidence. Interest in EVs continues to grow, but we need to sustain this demand over the longer term.

European stock markets are relatively quiet this morning: the UK's blue chip FTSE 100 is an outlier, up by about 0.3%. But the Stoxx Europe 600, which tracks the biggest companies across the continent, is up by just 0.02%.

Oil prices are down this morning. Brent crude, the international benchmark, is down 0.4%, as tankers continue to pass through the strait of Hormuz. The key shipping channel had been blocked as a result of the US-Israel war with Iran.

The oil cartel Opec also agreed on Sunday to further increase their output targets by 188,000 barrels per day from August, following similar increases in June and July.

EasyJet shares jump 10% after signalling intention to accept £5.5bn takeover offer

Shares in the airline easyJet have jumped 10% this morning to a four-year high, after it said last night that it intends to accept a £5.5bn takeover offer by the US investment firm Castlelake.

The companies announced an agreement in principle on Sunday evening, and requested an extension to a deadline to complete the deal formally. The agreement came after weeks of negotiations and several rejected offers.

The FTSE 250 airline said it was minded to accept an offer at £6.90 a share. If the deal completes, it could be worth nearly £800m for easyJet's founder, Stelios Haji-Ioannou, who still owns more than 15% of the company along with his family.

EasyJet had rejected an offer of £6.50 a share 10 days earlier, saying it substantially undervalued the business. The first bid was worth £5.60 a share.

Its shares are now trading at £6.16 a share. They were priced at £5.58 when stock markets closed on Friday.

Susannah Streeter, chief investment strategist at the broker Wealth Club, notes easyJet has endured a difficult few months amid the conflict in Iran and weak consumer confidence.

Those pressures depressed the airline's share price and created an opportunity that Castlelake clearly believes the market has mispriced. The private equity firm, which has deep expertise in aircraft leasing and aviation finance, appears to see long-term value in easyJet's modern fleet, strong balance sheet and growing holidays business.
Private equity ownership would almost certainly usher in a new phase for easyJet. While being outside the glare of the public markets could give management greater freedom to invest for the long term, private equity investors are typically laser-focused on driving efficiency and boosting returns. That can often mean a fresh look at every aspect of the business - from staffing levels and head office costs to supplier contracts and operational spending.
...The bid is also the latest example of UK-listed companies becoming attractive targets for overseas buyers, reinforcing concerns about the City of London's shrinking role as a home for publicly traded businesses.

Ocado co-founder Tim Steiner to step down as CEO in 2028 amid succession debate

The online grocer Ocado has said its founder and chief executive Tim Steiner will remain in post until at least 2028.

He will then "continue to be actively involved with the company through 2029" in an advisory "founder role", Ocado said in a statement.

The board has been searching for a successor for Steiner, although some investors have called for the chair Adam Warby to resign instead.

Succession planning is expected to conclude around the start of Ocado's 2028 financial year (which will begin in December 2027). The company said on Monday:

The board and Tim have been engaged in a thoughtful and collaborative succession planning process designed to support Ocado's long-term success.

Steiner co-founded Ocado in 2000 with Jason Gissing and Jonathan Faiman in a bid to revolutionise grocery shopping through an online platform. Its share price ballooned during the pandemic, with its market value rising above £20bn - but its shares have since fallen more than 90% as sales have slowed and investors have lost confidence in its ability to sell its software to other retailers.

Analysts at the broker Peel Hunt write this morning:

This is perhaps a reaction to the reports in the FT late last week that a quarter of shareholders were now threatening to oust the chair too. Why the drawn-out timeline? Given the calibre of internal talent and an existing deputy CEO, 18 more months as CEO plus 12+ months as founder feels long.
Whilst we are not privy to what is inside their heads, we would not be surprised if the company has structured it this way to allow for the share price to react positively to news flow over that time period (including turning cash flow positive during 4Q26, and then full year FY27) and perhaps see shareholders change their views of Steiner by that point. Also, it will not be the first time that an ousted CEO/founder has been brought back in as CEO later.

Sky, which is owned by the US media and telecoms giant Comcast, has been in talks since at least last November to buy ITV's media and entertainment business.

The deal will include the ITVX platform as well as its free-to-air channels, but not ITV's studio operation. All of ITV's public service commitments will be maintained under the deal.

The takeover is expected to create the UK's biggest commercial broadcaster, as traditional media companies adapt to the rise of US streaming giants such as Netflix and YouTube.

Introduction: Sky parent finalises £1.6bn acquisition of ITV broadcast operations

Happy Monday and good morning to those who stayed up late marking England's victory in Mexico.

To start the week: ITV has finalised the sale of its broadcasting and streaming operations to Sky for £1.6bn, a transaction set to form the United Kingdom's largest commercial broadcaster.

ITV noted the transaction will distribute roughly £950m in cash to shareholders, equating to 25p per share.

The firms have also committed to at least £2.1bn in content spending from 2028 through 2032. Completion is projected for the latter half of next year.