Sky said the new business would account for about 20 percent of in-home viewing in the UK.
Sky television on Monday said it had agreed to buy ITV's media and entertainment business for up to £1.6 billion ($2.1 billion), creating a heavyweight in UK streaming.
ITV, which provides free-to-air and paid services, first disclosed last November the interest shown by Sky, owned by U.S. cable giant Comcast, for its Media and Entertainment (M&E) business.
"The proposed transaction brings together two of the UK's most trusted, recognizable and complementary media organizations to create a stronger media business," Sky said in a statement Monday.
It added that "as competition for audiences intensifies, scale matters more than ever in order to compete with global streaming giants and YouTube in the UK."
