By Adam Whittaker

Comcast's Sky has agreed to buy ITV's television business for up to about $2.14 billion, in a deal that will combine two of the U.K.'s best-known media brands.

Under the deal, London-listed ITV will receive 1.2 billion pounds ($1.6 billion) and Sky's Love Productions business, before additional performance-related add-ons that could bring the transaction volume up to 1.6 billion pounds.

The deal gives the U.S. media company control of one of the U.K.'s most watched broadcasters at a time when younger viewers are shunning traditional broadcasters in favor of streaming platforms like YouTube and Netflix.

Sky expects the combined business to account for around 20% of all in-home viewing in across the U.K and believes the larger group will be able to better compete with global media and technology companies.

ITV is the U.K.'s largest commercial streaming and broadcaster and is the maker of shows such as "Love Island" and "I'm a Celebrity... Get Me Out of Here!"

The deal comes after Comcast said late June that it would separate its media and connectivity businesses. The cable and entertainment company, home to "Saturday Night Live," "Law & Order" and Bravo, aims to spin off NBCUniversal and Sky, establishing a pure-play media company.

Sky will combine ITV's free-to-air broadcasting and advertising-funded streaming platform with its subscription television, as well as its wider broadband and mobile products. They are betting that scale and diversified revenue streams will help navigate the threat posed by the streaming platforms.

"This is a defining moment for British media and an opportunity to build a stronger future for two of the U.K.'s most loved and trusted brands," Sky Group Chief Executive Dana Strong said.

ITV expects to return around 950 million pounds of the proceeds to shareholders.

Under the agreement, ITV Studios will be separated and listed in London. It will enter into a long-term content supply agreement with ITV's media and entertainment unit and Sky, valued at a minimum of 2.1 billion pounds from 2028 to 2032.

The deal is subject to regulatory approvals and is expected to complete in the second half of 2027.

Write to Adam Whittaker at adam.whittaker@wsj.com