Media group Pearson, owner of the Financial Times, has announced a deal to merge its television business with a pan-European broadcaster.

The link-up with CLT-Ufa will form an international TV and radio giant. thought to be worth more than £12 billion.

The deal will bring together Pearson, German media group Bertelsmann and Audiofina, a Belgian-owned company. Bertelsmann and Audiofina each own half of CLT-Ufa. Annual revenues at the new group will total some £2.4 billion.

The companies plan to give the new force in European television its own listing on the London Stock Exchange. On last year's sales figures, the combined company would have generated underlying profits of £278 million.

Marjorie Scardino, chief executive of Pearson, said: "This deal puts Pearson Television at the heart of one of Europe's most extensive and most popular broadcasting networks."

The merger will put the new company in control of Britain's Channel 5 by combining Pearson and CLT's stakes. Between them, the holdings add up to 65 per cent ownership of the channel. Richard Eyre, who recently left ITV to become Pearson Television chief executive, will be charged with leading the content of the new company and directing its future strategy. He is also expected to become chairman of Channel 5.

Didier Bellens, chief executive of CLT-Ufa, will take on the same role at the new company. CLT-Ufa's channels, which include RTL in Germany, will provide a widespread broadcasting platform for Pearson's programmes, which include hits such as Baywatch and the Bill. It will also be a major force in internet sites and content.

Pearson added that the combination of the operations would make the group more able to develop new television shows and formats.

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