The long awaited ITV merger looks almost certain to go ahead unchallenged after shareholders gave the deal their unanimous support in a series of extraordinary general meetings held yesterday.
Almost all of Carlton and Granada’s investors voted in favour of the £5.4 billion merger that will see the creation of a single ITV company controlling more than 50% of the television advertising market.
It is expected the deal will go ahead without a hitch and trading in shares of the newly created ITV plc will begin on 2 February. Carlton and Granada have only one final hurdle to face at the end of this month when the High Court approves arrangements for the merger.
A shortlist has already been drawn up for the role of chairman at the newly merged company and interviews are currently taking place. However, no appointment will be made until the merger is fully complete (see Green Set To Go As Granada Withholds Support).
It is understood that the creation of a single ITV could generate cost savings of up to £100 million, which is nearly double the figure originally envisaged by Carlton and Granada. However, it looks likely that large number of jobs will have to be cut as the two broadcasters integrate their back office operations.
The Government gave its formal approval to the undertakings of the deal last month. However, the ITV partners will have to abide by a number of conditions to prevent the merged entity from using its dominant position to monopolise the multi-billion pound market for airtime sales (see Government Formally Accepts Conditions Of ITV Merger).
The most controversial of the Competition Commission’s recommended conditions is the contract rights renewal remedy, which allows advertisers to roll over the discounts on their current ITV contracts for the next three years.
It is understood that some media agencies are unhappy with the terms of their existing 2003 contracts and are unwilling to have them set as the base year for the contract rights renewal remedy (see Advertising Industry Consulted On ITV Merger Remedy).
However, ITV is attempting to improve its relationship with advertisers and recently poached RAB managing director, Justin Sampson, to take up a new role designed to ensure that the customer is put at the heart of all aspects of the sales operation.
As director of customer relationship management, Sampson will also assume responsibility for helping ITV assume a brand leader role in working with other television companies to promote the medium to agencies and advertisers.
