Satellite television firm BSkyB has announced a £125 million takeover of Sir Alan Sugar's Amstrad.
Amstrad, founded by BBC1's The Apprentice star Sir Alan in 1968, currently designs and develops about 30 per cent of Sky's set-top boxes.
Sky estimates that the set-top boxes make up more than three-quarters of Amstrad's revenues and hopes the acquisition, which represents a 24 per cent premium on Amstrad's closing share price yesterday and is subject to shareholder approval, will give it greater control over product design.
Commenting on the deal, Sir Alan, who owns a 27.9 per cent stake in Amstrad, said he "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," he continued.
"Sky is a great British success story. I'm proud to have worked so closely with it, and I look forward to continuing to play a part in this exciting business."
Sky chief executive officer James Murdoch, the son of media tycoon chairman Rupert Murdoch, added: "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."