British Sky Broadcasting Group, the U.K.'s dominant pay television provider, said Tuesday that it will buy computer and electronic hardware manufacturer Amstrad for 125 million pounds ($253 million) in cash.
The broadcaster said the acquisition would help boost its 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," said BSkyB chief executive James Murdoch, the son of Rupert Murdoch, who operates a global media empire.
Sir Alan Sugar, the chief executive of Amstrad and its majority shareholder, said 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 telecoms, 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 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.