BSkyB buys Sir Alan Sugar's Amstrad for £125m

by Nikki Sandison, Brand Republic 31-Jul-07, 09:00

LONDON - BSkyB has agreed to buy Amstrad, once famous for its home computers but now in the set-top box business, in a £125m deal that will allow the broadcaster to design and develop its products in-house.

Amstrad, which was founded by 'The Apprentice' frontman Sir Alan Sugar, supplies approximately 30% of the set-top boxes purchased by the Sky Group.

Orders from the broadcaster accounted for about 75% of Amstrad's revenues in the financial year ended June 30 2007.

Sky believes that the deal will reduce its costs and add to its earnings by allowing the broadcaster to design its products in-house and be more innovative.

Further benefits include Sky gaining greater control over product design and technical specification and increasing flexibility so that it can deliver "continual improvement in product quality".

James Murdoch, Sky's chief executive officer, said that Sky and Amstrad have had a "long and positive relationship" and that the acquisition would "help us to drive innovation and efficiency for the benefit of our customers".

Sir Alan Sugar, Amstrad's chairman and chief executive, said: "I cannot imagine a better home for the Amstrad business and its talented people. Our companies share the entrepreneurial spirit of bringing innovation to the largest number of customers. Sky is a great British success story."

Last week, BSkyB reported a 10% jump in revenues to £4.5bn for the year ended June 30, during which it added a net 406,000 new subscribers to reach 8.58m.