BSkyB buys Amstrad for €185m
Satellite broadcasting player BSkyB is buying one-time UK computer giant Amstrad for €185m (£125m sterling) in a deal that will see the firm continue to manufacture Sky set-top boxes and Sky+ digital video recorder boxes.
The deal will provide BSkyB with an in-house set-top box design team and will enable the company to expand into new services such as broadband.
It is understood that the venerable Sir Alan Sugar will run the business for his new boss, BSkyB chief James Murdoch.
Sugar will retain a 35pc stake in the company he founded in 1968 and will get £35m sterling if the deal succeeds.
Technology and communications analyst Ovum lauded the deal, highlighting the increase in innovation and accelerated development of new products that will occur at BSkyB.
"There is a wealth of set-top box vendors, and BSkyB uses a mix of these providers for its Sky-branded set-top boxes," commented Carl Gressum, senior analyst at Ovum. "It works for Canal+, it works for PCCW and it works for Premiere – why does it not work for BSkyB?"
Gressum continued: "From a business point of view it must be rather unsettling for the set-top box vendors to see a huge European customer doing backwards integration.
"What we can expect in the near future is that BSkyB will drive Amstrad forward. BSkyB has a very good consumer understanding.
"Amstrad products are likely to be positioned as a premium offering such as HD DVR, and possibly also as a software platform for additional services or home network management. However, this deal is unlikely to go down well with BSkyB's suppliers, which could imply future issues with the supply chain," Gressum added.
By John Kennedy