ITV confirms talks with Sky over £1.6bn deal

ITV has confirmed early-stage talks over a possible £1.6bn deal to sell its broadcasting arm to Sky in a move that would see a major shakeup of Britain's television sector.

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Shares in ITV jumped nearly a fifth higher at one stage yesterday after it announced it was in “preliminary discussions” with Sky, later paring back gains to stand around 14% up.

It follows reports late on Thursday revealing Comcast-owned Sky was holding talks with ITV over a possible deal to buy the public service broadcaster's media and entertainment arm, which includes its terrestrial TV channels, streaming service ITVX and ITV’s 40% stake in ITN news.