But SoftBank President and CEO Masayoshi Son made no bones about the fact that the deal centered on the burgeoning IoT market.
Advertisement
But in Tokyo, investors in the Japanese firm gave the deal the thumbs down in Tuesday trading – with markets having been closed on Monday.
But Mr Hammond said the tie-up between ARM Holdings and SoftBank would “guarantee to double the number of jobs in ARM and turn this great British company into a global phenomenon”. This acquisition help SoftBank expand its presence in the growing internet of things (loT).
Masayoshi Son, chairman and chief executive of SoftBank, said the investment marked its strong commitment to the United Kingdom and the “competitive advantage” of the science and technology industries in Cambridge.
ARM is renowned as an innovator in the “Internet of Things” – its technology is used in the vast majority of smartphones, for example. It would outrank even Softbank’s own US$22 billion acquisition of a controlling stake in wireless operator Sprint in 2013 – a deal that left the Japanese group with hefty debts as the United States carrier’s losses mounted.
ARM has come to dominate the design of smartphone chips and is pushing into servers to challenge Intel, evolving from a small lab in a converted barn to a company whose designs are found in 95pc of smartphones.
SoftBank will maintain ARM’s organization, existing senior management team, brand, partnership-based business model and culture to continue its strong track record.
The PM’s official spokeswoman said the swoop by the Japanese firm for one of the UK’s biggest technology companies “was a clear vote of confidence in Britain” and showed the United Kingdom could make a success of leaving the European Union.
For $32 billion (a 43% premium to ARMH’s closing price Friday), Softbank gets the premium mobile-chip design house in the world.
With the mobile phone market slowing, ARM is adding new customers in the automotive industry and targeting growth in processors for network equipment makers and servers. Maybe Masa Son can create value longer-term (as he did when he acquired a loss-making Vodafone Japan and turned it around in 3-5 years; or when he invested $100m in Alibaba and reaped rewards after 15 years), but in near-med term, we believe this may hurt shareholder value. Cambridge-based ARM’s advisers, including Goldman Sachs, the only top-five U.S. investment bank in a lead role, as well as Lazard, will likely get the same.
“They have confirmed their commitment to keep the company in Cambridge and to invest further to double the number of United Kingdom jobs over five years”.
Advertisement
Britain’s new prime minister, Theresa May, also welcomed SoftBank’s takeover despite vowing to defend British firms from foreign takeovers.
