Shares in Japan’s Softbank have fallen 10% after it agreed a controversial £24.3bn deal to buy United Kingdom microchip designer ARM Holdings.
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A deal would give SoftBank control of a cash-generating mobile chip leader, and a share of revenue in everything from smartphones to connected gadgets in the home.
However, less than half the microchips produced by its design previous year were used in smartphones, the rest were used in domestic appliances requiring processing power, such as televisions and washing machines. Augmented-reality headsets, biometric sensors, self-driving cars, commercial drones and smart watches all use ARM technology.
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.
ARM employs 4,064 people around the world, compared with SoftBank’s 63,000.
Common sense, as expressed by ARM co-founder Hermann Hauser, said it represented a “sad day” for the UK’s technology sector.
Chancellor Philip Hammond reacts to this news by saying that this is not a loss for the United Kingdom, on the contrary, it shows that United Kingdom is still open for business with worldwide investors: “Britain is open for business – and open to foreign investment”. “Britain is open for business – and open to foreign investment”, Hammond said.
Meanwhile, Son was also having discussions with the U.K.’s new Prime Minister, Theresa May, to assure the government that its headquarters and management team will remain in Cambridge.
Analysts also expect more British firms to become foreign takeover targets, with the plunge in the value of the pound making United Kingdom firms cheaper following the Brexit vote.
Its chief executive Masayoshi Son, pictured with ARM chairman Stuart Chambers, said: “ARM will be an excellent strategic fi t as we invest to capture the very significant opportunities provided by the “internet of things”.
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Softbank is one of the biggest technology companies and it has previously acquired Vodafone’s Japanese operations and the U.S. telecoms company Sprint.
