Sky, the Comcast-owned U.K. pay-TV operator, has agreed on terms to buy British broadcaster ITV’s media and entertainment division, which is its network arm. Reuters reported the development on Thursday, citing two people familiar with the negotiations.

As part of the £1.6 billion ($2.1 billion) deal, ITV Studios – the standalone production unit – would acquire “The Great British Bake Off” producer Love Productions. The transaction could be valued between £80 million and £120 million based on comparable deals, and an earn-out, the sources said. ITV Studios is not part of the Sky acquisition.

The deal had shifted in a positive direction in the past week, Reuters said, and was now being finalized by lawyers, according to the sources, speaking on condition of anonymity.

Following the Reuters report, ITV shares rose 2.9% on Thursday, giving the group, which comprises its broadcast and streaming unit and ITV Studios production company, a market ‌value of £3.1 ⁠billion ($4.08 billion).

Reuters reported last month that the transaction would include a payout dependent on the ITV unit’s performance of about £200 million ($264 million).

Reuters’ sources claimed that the deal could be closed in the next two weeks, but one cautioned that the timing could slip due to legal complications.

However, even then, it won’t be a done deal. The U.K.’s Competition and Markets Authority and media regulator Ofcom both need to approve it, and the final decision lies with the British government’s culture secretary, Lisa Nandy. Rival broadcasters Channel 4 and Channel 5, which are both dependent on advertising revenue, are likely to oppose the deal on competition grounds. Another issue is ITV’s 40% stake in ITN, which supplies news output to Channel 4 and Channel 5 as well as ITV.

The deal creates a merged company that can better compete with Netflix, YouTube, Amazon Prime Video and Disney+ in the U.K. streaming market. ITV has been focusing increasingly on boosting the reach of its streaming platform, ITVX, as audiences and advertisers continue to drift away from its linear channels.