End of an era as Sky buys Amstrad

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Having risen through the ranks to become one of the biggest names in consumer electronics and computing in the UK, Amstrad is now set to disappear from history after its board recommended a takeover bid from broadcaster BSkyB, its biggest customer.

The cash offer from BSkyB, which values Amstrad at £125 million will give Sky access to research and development facilities and staff, as well as manufacturing facilities. The broadcaster hopes to speed-up development and time-to-market for its future satellite receiver and associated products by bringing the process in house. At present its satellite receivers, including its Sky+ digital video recorder, are manufactured for Sky by several companies including Amstrad, Pace and Thomson.

"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" said Sky's chief executive James Murdoch.

Once a household name making everything from hi-fi systems to laptop computers, Amstrad has steadily moved away from consumer electronics and computing to focus on the wholesale electronics market. Its main business for the last 10 years has been satellite receivers, which is has sold to BSkyB in the UK, and to other satellite and cable TV broadcasters around the world.

Amstrad was responsible for the CPC and PCW range of 8-bit home and business computers in the mid 80s, and in 1986 bought the Sinclair computer business and brand. The company then went on to become one of the biggest names in the European PC market, starting with the PC1512 and PC1640 IBM-compatible PCs in 1986. By the mid 80s it held around 25 per cent of the European computer market by sales. However, amid falling margins, the growth of high-volume direct manufacturers and the loss of reputation after a batch of faulty hard drives forced it into a product recall; Amstrad quit the PC business in the early 90s to concentrate on consumer electronics such as satellite receivers, mobile phones and the Emailer telephone. Amstrad later sold its Dancall mobile phone business to Bosch and axed the Emailer last year amid poor sales. Amstrad's sister company Viglen still makes computers and is not part of the sale.

"Amstrad has worked closely with Sky for many years and I cannot imagine a better home for the Amstrad business and its people. Our companies share the entrepreneurial spirit of bringing innovation to the largest number of customers" said Amstrad's chairman and chief executive Sir Alan Sugar in a statement.

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