Sky buys Amstrad in £125m deal

Sir Alan Sugar, the no-nonsense entrepreneur and star of the BBC show The Apprentice, has in effect been hired by Rupert Murdoch after agreeing to sell Amstrad, the electronics company he founded in the 1960s, to Sky in a £125m deal.

Despite his flamboyant style and long history of running his own companies, Sir Alan will stay on at Amstrad after the sale to Sky is completed, and will draw a wage from the satellite TV giant. The deal will net Sir Alan around £35m and follows the sale of his residual stake in the football club Tottenham Hotspur for £25m earlier this year.

Sky, which is run by James Murdoch and counts Rupert Murdoch's News Corp as its largest shareholder, has paid £102m to buy Amstrad. The deal is somewhat of a no-brainer for Sky, which sources around 30 per cent of its set-top boxes from Amstrad. Although Sky will continue to source set-top boxes from other suppliers such as Pace Micro and Thomson, the deal will give the satellite TV provider greater control over the development of advanced set-top boxes in the future.

Despite its history making computer hardware, Amstrad no longer manufactures set-top boxes. The company designs the kit in conjunction with Sky before outsourcing the manufacture of the products. It is the second leftfield move made by Mr Murdoch since he took over at Sky after the company's acquisition of the business broadband supplier easynet last year. The satellite TV company has since launched broadband and telephony services to try to diversify its business.

Amstrad has struggled since its heyday in the 1980s when it launched the UK's first mass-market computer, becoming a household name and commanding a peak market value of more than £1.2bn. In recent years, the company has become overly dependent on Sky, its largest customer accounting for almost 75 per cent of its sales, and has been criticised for not spending enough on research and development.

The company's last big product launch, the "em@iler" super-phone in 2000, failed to revive its prospects and left the former electronics giant vulnerable to competition in the set-top box market. The company still has a small business selling consumer audio electronics and supporting the em@iler.

Sir Alan said: "Amstrad has worked closely with Sky for many years and I cannot imagine a better home for the Amstrad business and its talented people. Sky is a great British success story. I'm proud to have worked so closely with it, and look forward to continuing to play a part in this exciting business."

How long Sir Alan, who turned 60 earlier this year, will stay on the Sky payroll remains to be seen given his standing as one of Britain's most high-profile business personalities. He is likely to focus more of his attention on the property vehicle Amsprop and has committed to at least one more series of The Apprentice.

He was ranked number 84 on the most recent Sunday Times Rich List with an estimated fortune of around £830m.

Business that began selling aerials from back of a van

Sir Alan Sugar is one of Britain's most high-profile businessmen and the face of Amstrad. The son of a tailor, he was born in Hackney, east London. He left school at 16 and was soon selling electrical goods such as TV aerials from the back of a van.

He founded Amstrad - or Alan Michael Sugar Trading - in 1968 in order to design, develop and sell a variety of electronics products. Having listed Amstrad in 1980, he shot to fame after launching a series of massively successful word processors and home computers.

Sir Alan also gained notoriety when he took over the football club Tottenham Hotspur in 1991.

Amstrad grew to become one of Europe's largest electronics companies, but struggled in the 1990s due to intense competition and technical problems with some of its computers. Attempts to crack the PDA and games consoles market fell flat and its flagship em@iler device also failed to revive Amstrad's prospects.

However, Sir Alan was back in the public gaze in 2005 when he agreed to be the star of the BBC TV series The Apprentice, a move that has made him one of Britain's best-known business figures, famous for his "You're Fired" catchphrase and his roasting of unsuccessful candidates.

Successful candidates went on to work at Amstrad. His decision to sell Amstrad to Sky, the company's largest customer, reflects the demise of the electronics company's fortunes and Sir Alan's increasing activity in the property market.