CARLTON GRANADA MERGER: Rival broadcasters deny merger after Govt greenlights a single ITV.

Commercial TV broadcasters are denying that they will be forced to merge their sales operations after the trade secretary, Patricia Hewitt, gave the green light for a single ITV sales house.

'There's no intention to merge us into ITV and we don't envisage it having an effect on us,' Paul Corley, the managing director of GMTV, said. Other broadcasters also said that their offerings were so distinct as to make a merger unnecessary.

Privately, however, rival sales directors have been examining their options since Carlton and Granada announced they would merge last year. These negotiations will intensify following Hewitt's decision, which allows for a merged ITV sales house that will control 52 per cent of the TV ad market.

In particular, the industry is monitoring the movements of five's deputy chief executive, Nick Milligan, who may want to merge his sales department with that of Channel 4 or Sky.

Hewitt took the majority advice of the Competition Commission and permitted ITV to have a full-blown merger, on the condition that it changes the way that it trades its airtime with agencies. The conventional wisdom was that Hewitt would rule that the two companies would only be able to merge if they divested both of their sales houses.

The pounds 4.5 billion merger will result in savings of pounds 55 million. ITV claims it will reinvest this in its schedule to maintain audience share, but next year's schedule investment is likely to remain static.

It brings to an end 48 years of federal ITV broadcasting and finally creates a UK broadcaster that will possess the resources to compete with the BBC and Sky.