Introduction: Sky owner agrees to buy ITV's broadcasting business in £1.6bn deal
Good morning and happy Monday to those who celebrated late last night.
To start the week, ITV has agreed to sell its broadcasting and streaming business to Sky in a £1.6bn deal, a move anticipated to create the UK’s largest commercial broadcaster.
The agreement includes a £1.2bn cash component payable upon completion, alongside the contribution of Sky’s Love Productions, known for producing The Great British Bake Off, valued at an enterprise value of £200m. Additionally, Sky will pay £200m in cash contingent on meeting advertising targets in 2027.
ITV stated that the deal will return approximately £950m in cash to shareholders, equating to 25p per share.
Both companies have committed to investing at least £2.1bn in content supply from 2028 to 2032. The transaction is expected to finalize in the second half of next year.
"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." – ITV chair Andrew Cosslett
"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." – Sky chief executive Dana Strong
Meanwhile, last night, easyJet announced its intention to accept a £5.5bn takeover offer from US investment firm Castlelake, which would take Britain’s largest low-cost carrier private.
The companies disclosed an agreement in principle on Sunday evening and requested an extension to the deadline for formal completion. This agreement followed weeks of negotiations and several rejected offers.
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
US stock market set to rise at the open
Less than 30 minutes remain before the US stock market opens, with futures indicating a broadly positive start to the week. S&P 500 futures are up 0.4%, Nasdaq futures have risen 1.2%, while Dow futures are down 0.09%.
Chip designer Broadcom's shares are up 4.2% pre-market after extending its partnership with Apple through 2031 to develop and supply custom chips.
Boost City regulator’s powers to help protect UK consumers from AI, says watchdog
Closer to home, ministers have been urged to strengthen the City regulator’s powers to safeguard consumers from AI risks, according to a landmark review.
The Mills review by the Financial Conduct Authority (FCA) examined AI’s impact on financial services from 2030 onward, noting a shift from human-led activities to AI-enabled services for everyday consumers.
While AI could enhance customer support and make financial advice more accessible to lower-income households, it also raises risks of fraud, cyber threats, and consumer harm.
Lockheed Martin to buy naval tech group Ultra Maritime in $3.45bn deal
US defence company Lockheed Martin has agreed to acquire naval technology group Ultra Maritime, owned by private equity firm Advent, in a $3.45bn (£2.6bn) transaction.
Ultra Maritime is being sold via Advent’s Cobham Ultra subsidiary, formed after combining it with Ultra Electronics.
The company specializes in anti-submarine warfare, including torpedo defence, sonar systems, and sonobuoys for submarine detection and tracking.
"When we invested in Ultra Maritime in 2022, we saw a business with mission-critical technology and a vital role in protecting allied nations from undersea threats, but one that had been underinvested and was not yet fully delivering for its customers. Over the past four years, we have changed that. Ultra Maritime is now a stronger, more innovative partner to allied navies – with improved execution, greater industrial capacity and next-generation autonomous solutions that position it well for future warfare." – Shonnel Malani, managing partner at Advent and chair of Ultra Electronics board
"Undersea superiority belongs to those who move fastest and work together best. By joining forces with Ultra, we’re accelerating our commitment to deliver the most advanced undersea and anti-submarine warfare capabilities to our US and allied partners across the globe." – Stephanie C. Hill, president at Lockheed Martin Rotary and Mission Systems
European stock markets slip
European stock markets have turned negative this afternoon. The UK’s FTSE 100 is down 0.3%, led by tech solutions group Halma, which has declined about 3%.
The French CAC 40 is down 0.04%, the German DAX is down 0.09%, and the Stoxx Europe 600 has fallen 0.4%. Among the worst performers is Dutch chip equipment company BE Semiconductor Industries, down 6.8%.
Billionaire Zuber Issa strikes deal to buy former Prax Group petrol stations
Blackburn-based billionaire Zuber Issa has agreed to purchase 85 petrol stations formerly owned by the collapsed Prax Group.
Issa’s EG On The Move plans further investments following the acquisition of these sites, which are managed by independent operators. The company now owns approximately 285 locations across the UK.
"Our business is built on strong partnerships with not only retail brand partners but now independent commission operators. We are delighted to welcome the Prax network into our UK site portfolio. We look forward to working alongside each operator to build on the strengths of their businesses, helping make every site more effective, more competitive, and even more attractive to customers."
Prax was previously a major oil group with a portfolio of petrol stations and an oil refinery supplying much of the UK’s fuel.
EG’s investment in the former Prax sites may include enhancing motorist welfare services, expanding foodservice offerings, exploring grocery and merchandise ranges, and introducing fast electric vehicle charging and car wash solutions.
Novartis to buy UK cancer treatment group Myricx Bio in $1.5bn deal
Swiss pharmaceutical company Novartis has agreed to acquire British cancer treatment developer Myricx Bio in a deal valued up to $1.5bn (£1.1bn).
Novartis will pay $1.1bn upfront, with an additional $400m in potential milestone payments.
Myricx Bio, headquartered in London, was founded in 2019 after spinning out from Imperial College and the Francis Crick Institute.
The company is developing a new class of antibody drug conjugates (ADCs), which deliver targeted cancer treatments to affected cells.
This acquisition follows a trend of large pharmaceutical companies acquiring smaller UK biotech firms. Last year, US company Merck paid $10bn for London-based Verona, a respiratory drug developer. In January, Amgen acquired cancer biotech Dark Blue Therapeutics for $840m.
"ADCs have become an important part of cancer treatment, but there remains a clear need for new payload mechanisms to overcome resistance and expand their impact for patients. Myricx Bio has developed a promising NMTi payload platform with a differentiated mechanism that could broaden the use of ADCs across multiple tumor settings. This proposed acquisition reflects our strategy to scale innovative platforms, as we have with radioligand therapies, to deliver more durable, transformative treatments for patients." – Fiona Marshall, president of biomedical research at Novartis
Novartis shares have declined 0.7% this morning. The deal is expected to close in the second half of this year.
Sky's £1.6bn takeover of ITV broadcasting will trigger some job losses, CEO says
Sky’s £1.6bn acquisition of ITV’s broadcast and streaming business will result in some job reductions, according to Sky CEO Dana Strong.
While she did not specify the number of job cuts, she indicated reductions will occur in commercial and corporate functions.
"There is some duplication in roles in corporate functions and commercial functions as there is when you bring, inevitably, two organisations together. But it’s the minority of the synergy."
Sky anticipates generating £200m in annual cost savings from the acquisition.
"We need to get a little bit closer to the businesses to look at where exactly the overlaps are."
England win against Mexico boosts high street footfall 143% after midnight
England’s victory over Mexico in the World Cup last night positively impacted UK high streets, with footfall increasing 143.6% year-on-year between midnight and 6am, according to MRI Software. It should be noted that no World Cup match occurred during this time last year.
Footfall in market towns rose 175.5%, and in historic towns it increased 159.9%.
"For the hospitality sector, this is exactly the kind of result they’ll have been hoping for. At a time when consumers remain selective about where they spend, the World Cup is proving to be a powerful footfall driver, creating a welcome boost for the night-time, and local economy. As England prepares for its next game, we expect these uplifts to gather momentum, especially as they enter the quarter finals. For retailers and operators, the game plan is clear: align staffing, promotions and trading hours with key matches to make the most of the increased footfall, longer dwell times and celebratory spending that major sporting moments can bring." – Jenni Matthews, retail analyst at MRI
England’s next match will be the quarter-final against Norway in Miami this Saturday at 10pm BST.
Additional data from the Society of Motor Manufacturers shows 213,166 units sold in June, the best monthly performance since 2019.
The increase was driven entirely by electrified vehicles, attributed to ongoing manufacturer investment in diverse models and powertrains offering lower and zero emissions, as well as an expanded range of brands operating in the UK.
Rob Wood, chief UK economist at Pantheon Macroeconomics, commented:
"The money and credit data continue to support the picture that consumers are willing to reduce their saving rate to smooth consumption. Replacement demand for vehicles also likely remains strong too. So, we think that car registrations will continue to rise slowly over the coming year."
Registrations of electric and plug-in hybrid vehicles continue to support overall numbers. Battery electric vehicle registrations rose 35% year-over-year in June, up from 34.2% in May, while hybrid registrations increased 25.3%, up from 23.9% in May.
Conversely, registrations of combustion-powered vehicles declined, with diesel car registrations down 24.4% year-over-year and petrol-powered vehicles falling 4.0%.
UK construction downturn eases slightly in June
The UK construction sector contracted again in June, though at a slower pace compared to May’s six-year low.
The S&P Global construction purchasing managers’ index (PMI) rose to 38.4 in June from 38.2 in May; readings below 50 indicate contraction.
Tim Moore, economics director at S&P Global Market Intelligence, noted a softer reduction in commercial building work.
"House building and civil engineering activity nonetheless registered sharper declines than in May, with the latter seeing its weakest performance since the start of the pandemic. New work decreased to the least marked extent since March, despite widespread reports of challenging market conditions. Construction companies commented on headwinds from subdued housing sales, elevated interest rates and squeezed consumer finances, alongside cutbacks to business investment plans. Some firms noted delays with infrastructure work and fewer public sector tender opportunities, but energy markets were cited as an area of positivity. Supply chain challenges appear to have receded, with vendor delivery times lengthening to the smallest degree since March. Construction companies also reported a slowdown in input price inflation from the near four-year peak seen in May. June data indicated a recovery in business activity expectations across the construction sector since May, although confidence levels remain well short of historic trends. A number of survey respondents suggested recent new contract awards and an expected improvement in broader market conditions had underpinned optimism."
Elsewhere, new data shows German industrial orders rose 1.9% in May compared with the previous month, exceeding analyst expectations of 1.5% growth.
Carsten Brzeski, global head of macro at broker ING, 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
Preliminary figures from the Society of Motor Manufacturers and Traders (SMMT) show new car registrations in the UK increased 11% in June compared with last year.
Battery electric cars accounted for about 30% of the market.
"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." – Ian Plummer, chief customer officer of Autotrader
European stock markets are relatively quiet this morning: the UK’s FTSE 100 is up about 0.3%, while the Stoxx Europe 600, which tracks major continental companies, is up just 0.02%.
Oil prices have declined this morning. Brent crude, the international benchmark, is down 0.4%, as tankers continue to transit the Strait of Hormuz, a key shipping channel previously blocked due to the US-Israel conflict involving Iran.
The oil cartel OPEC agreed on Sunday to increase output targets by 188,000 barrels per day starting in August, following similar increases in June and July.
EasyJet shares jump 10% after signalling intention to accept £5.5bn takeover offer
Shares in easyJet surged 10% this morning to a four-year high after the airline announced its intention to accept a £5.5bn takeover offer from US investment firm Castlelake.
The companies announced an agreement in principle on Sunday evening and requested an extension to the deadline for formal completion. This followed weeks of negotiations and several rejected bids.
EasyJet indicated it is inclined to accept an offer at £6.90 per share. If completed, the deal could be worth nearly £800m for easyJet’s founder Stelios Haji-Ioannou, who owns over 15% of the company with his family.
Ten days earlier, easyJet had rejected an offer as substantially undervaluing the business; the initial bid was £5.60 per share.
Shares are currently trading at £6.16, up from £5.58 at Friday’s close.
"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." – Susannah Streeter, chief investment strategist at Wealth Club
Ocado co-founder Tim Steiner to step down as CEO in 2028 amid succession debate
Online grocer Ocado announced that founder and CEO Tim Steiner will remain in his role until at least 2028.
He will continue to be actively involved through 2029 in an advisory "founder role," the company said.
The board is currently searching for a successor, although some investors have called for chair Adam Warby to resign.
Succession planning is expected to conclude around the start of Ocado’s 2028 financial year, beginning December 2027.
"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-foun...
