Carlton believes its Central region viewers will be hard pushed to spot the effects of it being swallowed up in a proposed £7.8bn mega merger, writes David Duffy.

The TV franchise, which has its southern studio based at Abingdon, will become part of the UK's largest commercial TV company, in a merger with media group United News and Media.

Carlton spokesman Peter Rushton said: "I wouldn't expect viewers in Oxfordshire to notice any difference.

"The merger is unlikely to have any direct impact on our regional television output. What I can say is that being part of a larger and more successful organisation should be good for the Central region. "We expect it to be very much business as usual and it should create more jobs in our studio operations at Nottingham, where we have the capacity to make a lot of big shows. We hope that it will generate more jobs there."

The merger received a warm welcome in the City, with shares in both companies jumping following the announcement, which will create the UK's biggest commercial TV company.

The merged group will own six ITV franchises, as well as stakes in GMTV, Channel 5 and the digital broadcaster ONdigital.

The companies promised savings of £40m, mainly from merging the TV operations, including Carlton's three ITV franchises, Central, Carlton London and Westcountry with United's Meridian, Anglia and HTV operations. Between them the six franchises cover 65 per cent of the UK's TV-watching households.

Already question marks have been raised over the group's likely dominance in the TV market.

But Nigel Walmsley, head of Carlton's TV interests and the designated chairman of the merged group's TV businesses, said the plans were within the current rules.

He said: "We are very confident the plans we have announced do not breach any rules."

Michael Green, chairman of Carlton, will be chairman of the merged group, while Lord Hollick, chief executive of United, will take the same role in the merged company. Mr Green said: "This merger will create the UK's largest commercial television broadcaster. Bringing our businesses together will strengthen ITV, contribute to the success of digital terrestrial television and boost Britain's television production base."

After the merger the group will sell off some divisions, including the Technicolor film business, currently owned by Carlton, and parts of the Miller Freeman business publishing group, which is currently part of United News and Media.

Based on the latest financial results for the two companies, the merged group will have a total turnover of £3.97bn, with operating profits of £505.5m. As well as TV interests, a combined United-Carlton will own a raft of publishing operations.

These include the Daily and Sunday Express newspapers, Daily Star and Line One, an Internet service provider which is 50 per cent owned by United. The merger of the two groups will be subject to approval from shareholders and a raft of regulators, including the Department of Trade and Industry and the Independent Television Commission.

Shadow Culture Secretary Peter Ainsworth said of the proposed merger: "This deal, which must first be approved by shareholders and the competition authorities, reflects the need for British media companies to get together if they are to be able to take advantage of the worldwide opportunities opening up in this fast-growing sector. "It isn't common sense that Britain has some of the brightest media and creative talent around, yet our largest independent media companies are still relative cottage industries compared to the international giants.

"I hope that this merger, if approved, will enable the UK to begin building a powerful position in the global market for news and entertainment." Current rules on media ownership block any single company from owning TV channels with more than 15 per cent share of all TV viewing.

The combined group will not break this ceiling, but will have a 36 per cent share of all TV advertising revenue - above the current limit of 25 per cent.

In July, the Office of Fair Trading said it was reviewing the ceiling figure and analysts expect the cap to be lifted.

Story date: Wednesday 01 December

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