Japanese based Softbank has just acquired United Kingdom’s ARM for £24.3 billion, or $31.4 Dollars billion in cash. The Pound Stirling has declined over 28 percent against the Japanese Yen, which is why this entire deal had really good timing.
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Son told reporters on Monday that the acquisition was his “big bet for the future”, explaining that ARM was well positioned to capitalize as more and more devices – household appliances, cars and censors – are connected to the internet.
At a news conference, however, Softbank founder and CEO Masayoshi Son played down the suggestion it was an opportunistic deal, reports Reuters, instead stating he had been following the company for the last ten years and decided now was the right time.
As Alliance Trust analyst, Adrian Bommelaer explained, there has been a significant amount of M&A activity within the global semiconductor space and, in this regard, the deal is an understandable continuation of that trend.
ARM is a supplier of wireless microprocessor for Apple (NASDAQ:AAPL)’s iPhone and other mobile devices in the industry.
The British company’s customers shipped “about 15 billion ARM-based chips” in 2015, up nearly a quarter year-on-year, according to the group’s website.
“The board believes that by accessing all the resources that Softbank has to offer, ARM will be able to further accelerate the use of ARM-based technology wherever computing happens”.
On the conference call announcing the deal, which he called the most important event in Softbank’s history, Son predicted that 1,000 IoT processors will be working for every person in the world 30 years from now.
SoftBank has sought to assuage concerns about the impact on jobs in Britain, promising to “at least double” the number of employees employed by ARM in the United Kingdom over the next five years.
The company’s chips are seen as well-placed for use in the so-called Internet of Things (IoT), something which SoftBank said factored into their decision to make a buyout offer.
The deal, SoftBank’s largest to date, marks a departure for the Japanese group, whose tech and telecoms portfolio ranges from U.S. carrier Sprint to a stake in Chinese e-commerce giant Alibaba and humanoid robot “Pepper” – but does not yet include a major presence in the semiconductor industry.
SoftBank shares dived in Tokyo after the Japanese company unveiled plans for a £24.3 billion takeover of ARM in the biggest-ever European tech deal.
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ARM’s business module itself relies on the company licensing its designs to hardware manufacturers such as Samsung and HTC.
