BSkyB says it will acquire Amstrad for $253m

British Sky Broadcasting Group, the UK's dominant pay television provider, will buy computer and electronic hardware manufacturer Amstrad for 125 million pounds ($253 million) in cash, an Associated Press report said.

The Associated Press report said the acquisition would help boost BSkyB's product development capacity and increase its earnings.

'Sky and Amstrad have had a long and positive relationship. The acquisition accelerates supply chain improvement and will help us to drive innovation and efficiency for the benefit of our customers,' BSkyB CEO James Murdoch, the son of Rupert Murdoch, was quoted by the report as saying.

The Associated Press report also quoted Sir Alan Sugar, the CEO of Amstrad and its majority shareholder, as saying that he had agreed to the sale and could not 'imagine a better home' for his business. The proposal still requires the approval of Amstrad's remaining shareholders.

Amstrad is a manufacturer and supplier of telecom, audio, TV, video and digital satellite products. Founded by Sugar in 1968 as an electrical goods trader, Amstrad now makes technology accessible to the mass market.

BSkyB TV and Amstrad already have a close relationship, with Sugar's company supplying about 30% of the set-top boxes purchased by Sky in the year to June 30.

The report further said the acquisition of Amstrad will provide BSkyB with an in-house design and development capability, allowing it to source some of its products directly from specialist electronics manufacturers.