Pace Micro Technology, the Saltaire-based electronics giant, today launched a major assault on the European market by buying up a French competitor.

In a deal worth up to £22 million, Pace is set to take ownership of Xcom Multi Media Communications SA, a rival provider of digital television set-top boxes.

The deal was clinched through the offer of Pace shares as well as a cash settlement.

The initial agreement will see Pace handing over more than 2.6 million ordinary shares and £800,000 in cash.

Depending on Xcom's performance up to December 2002, the final settlement could grow to £22 million in combined cash and shares.

The move is seen as a major boost to Pace, already established as a world beater, as Xcom is the leading branded supplier in the French market place.

It also sells the cutting edge technology across Europe, the Middle East and Asia. In 2000, Xcom had a turnover of £16.3 million. It currently employs 60 workers, half of them engineers specialising in digital television gateway technology.

Pace said their work would bring several new innovations and products to its portfolio, including an ultra low cost digital TV adaptor. Pace also predicted the acquisition would boost the group's earnings within the coming financial year.

Malcolm Miller, Pace chief executive, said: "Xcom fits well with our strategy of strengthening position as the world's largest dedicated developer of digital television gateways."

Francis Brochon, who will remain as president of Xcom, said: "We are delighted to become part of the Pace group. In the last six years we have developed a thriving business and are proud of the achievements of our engineering team."

He added: "Within Pace we will now be able to develop these achievements even further as the digital revolution progresses throughout the world."

Founded in 1982, Pace employs 1,200 people in Saltaire, Cambridge, the US and Hong Kong.