When asked if the sale of ARM to SoftBank indicated the company’s technology was running out of steam Segars said not at all.
Advertisement
The companies expect the closing of the acquisition to occur by the end of September.
The purchase is Softbank’s largest takeover to date and piles on more debt at the technology group, whose investments also include U.S. telecoms operator Sprint and Chinese e-commerce giant Alibaba.
The bid for Arm, which is based in Cambridge will be the largest acquisition of a European technology business. The Prime Minister was clear that some takeovers have been in the national interest.
New Chancellor Philip Hammond said of the deal: “Just three weeks after the referendum decision, it shows that Britain has lost none of its allure to worldwide investors”.
Its 40% premium offer per share which sounds so generous says it all which means that the company will do anything possible to exploit ARM’s growing market.
The shares jumped to 17.25 pounds in London last night, but eased to close at 16.93 pounds as investors realised there would not be a bidding war.
The purchase of ARM “also marks our strong commitment to the United Kingdom and the competitive advantage provided by the deep pool of science and technology talent in Cambridge”, said Son. “It’s hard to see other suitors at this stage”.
As a result, ARM will become a wholly-owned subsidiary of Softbank, said the Japanese telecommunications supplier.
Though he has a low profile outside Asia, Son has always been an unconventional visionary in the often closed and clubby world of corporate Japan, turning profits from Japanese telecoms into bets on up-and-coming start-ups. SoftBank is particularly interested in the IoT opportunities associated with the acquisition.
ARM has been working on automotive projects, which could drive a lucrative new income stream as manufacturers work towards safer, more fuel-efficient and ultimately self-driving vehicles.
SoftBank had roughly 12 trillion yen of interest-bearing debt as of March.
Goldman Sachs and Lazard were the lead financial advisers to ARM and will receive the lion’s share of the money, according to the estimates.
What’s more, SoftBank actually plans on expanding the ARM workforce in the United Kingdom, saying they’ll at least double the employee count there over the next five years.
Segars added that ARM’s strategy would not change in the short term and that the senior management, including himself as CEO, would remain in place.
Advertisement
SoftBank shares were not traded yesterday, a market holiday in Japan.
