BSkyB is to directly enter the set-top box business by acquiring Sir Alan Sugar’s Amstrad in a £125 million (€171m) deal. Sir Alan will himself net a £42.4 million windfall.
BSkyB believes the purchase, made through the Sky Digital Supplies subsidiary, will help it to bring down costs and give it greater control over product design. “Sky and Amstrad have had a long and positive relationship,” said BSkyB chief executive James Murdoch. “The acquisition accelerates supply chain improvement and will help us to drive innovation and efficiency for the benefit of our customers.”
Amstrad currently supplies some 30% of the set-top boxes bought by BSkyB including the standard Digibox and Sky+ digital video recorder.
Around 75% of Amstrad’s revenues are derived from its business with Sky. Other customers include News Corp’s Sky Italia.
Established in 1968 in Brentwood, Essex, Amstrad became a major supplier of personal computers during the 1980s, and in recent years returned to the market with a telephone that also gave customers email and internet access.