This week the folks at SoftBank have announced plans to acquire ARM Holdings for a cool $31.4-billion Dollars.
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ARM makes microchips used in smartphones and employs more than 3,000 people in the UK.
‘It is also intended that ARM will remain an independent business within SoftBank, and continue to be headquartered in Cambridge, UK’.
The all-cash deal marks a big move by SoftBank into mobile internet, and comes right after the decision of its CEO Masayoshi Son to take back control of the investment strategy of the company from his designated successor and former deputy, Nikesh Arora, who left SoftBank in June.
SoftBank, a computer software company, first broke into the mobile phone industry in 2006 by acquiring Vodafone’s Japanese unit for $15 billion and digging deeper into telecommunications.
ARM has been in decline due to stagnating smartphone sales, of which the iPhone has noticed a notable decrease. The “Internet of things” is growing big time, ‘ he said. ARM has also proposed a final dividend of up to 6.76p per share to be paid in May 2017, although if the effective date of acquisition occurs earlier it will not be paid out.
Want the latest recommendations from Zacks Investment Research? “The future of ARM could have been determined by the United Kingdom management team”, he said.
Given that SoftBank’s debt of almost 12 trillion yen at the end of March was 4.5 times its net worth, foreign credit rating agencies have rated the company below investment grade. ARM will be an excellent strategic fit within the SoftBank group as we invest to capture the very significant opportunities provided by the “Internet of Things”.
Shares in ARM rocketed more than 40 percent on the London Stock Exchange following confirmation of SoftBank’s multi-billion pound takeover plan.
ARM’s revenues meanwhile jumped 15 per cent to nearly US$1.5 billion previous year on the design of chips used also in computer servers.
Then Autonomy was swallowed up by HP in an ill-fated deal, a year ago the chipmaker Qualcomm bought CSR, and now the biggest and best, ARM, is about to have a Japanese owner.
“This is good news for British workers, it’s good news for the British economy, it shows that, as the prime minister has been saying, we can make a success of leaving the European Union”, the spokeswoman added.
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ARM’s board has unanimously recommended the deal to shareholders, saying it “believes that by accessing all the resources that SoftBank has to offer, ARM will be able to accelerate the use of ARM-based technology wherever computing happens”.
