BSkyB's £125m takeover of Sir Alan Sugar's set-top box maker Amstrad is to be investigated by the Office of Fair Trading (OFT).
In a statement, the OFT said it was considering whether the deal is "expected to result in a substantial lessening of competition within any market or markets in the UK for goods or services that warrants reference to the Competition Commission for investigation and report".
In the year to June Amstrad supplied around 30% of Sky's set-top boxes. Sky believes it is responsible for around 75% of Amstrad's revenues. Amstrad's other large customer is BSkyB's Italian counterpart, Sky Italia, owned by News Corporation which has a controlling 39.1% stake in BSkyB.
Earlier this week, Pace Micro Technology announced a new business win with Sky. Pace said the order?financial details were not disclosed?to supply additional Digiboxes to Sky built on its relationship with the pay-TV giant.
"Under contracts awarded previously, Pace expects to commence deliveries of Sky HD boxes at the end of 2007 and continues to ship the digital video recorder, Sky+," said Pace.
The Competition Commission is currently investigating Sky's 17.9% holding in ITV.
Lovelace Consulting | 10.08.2007