Sky to Acquire Amstrad

LONDON, July 31: British
Sky Broadcasting has reached a deal to acquire the computer and electronic
hardware manufacturer Amstrad, whose set-top boxes are already used by a
portion of the platform’s subscribers, for £125 million.

The offer values the
company—founded by Sir Alan Sugar (also known as the mentor on the U.K.
version of The Apprentice)—at
a premium of 23.7 percent on the Amstrad closing price yesterday. The Amstrad
directors are unanimously recommending that shareholders accept the offer.

Amstrad currently designs
and develops set-top boxes to Sky’s specifications and then contracts out the
manufacturing. In the financial year ended June 30, 2007, Amstrad supplied
approximately 30 percent of the set-top boxes purchased by Sky. The platform
says that it accounted for approximately 75 percent of Amstrad's revenues in
that period.

The acquisition will
provide Sky with an in-house design and development capability, creating
potential cost savings and facilitating technological innovation; the ability
to accelerate the development of new products for consumers; and greater
control over product design and technical specifications.

Sky's CEO, James Murdoch,
noted: “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.”

Sugar, Amstrad's chairman
and chief executive, added: “Amstrad has worked closely with Sky for many years
and 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.”