He added: “Post Brexit, the pound has fallen 12 per cent against the Japanese Yen so it is an opportune moment for Softbank to make the acquisition and we may well see interest in United Kingdom companies from overseas buyers grow further as a weaker pound and lower costs make them even more attractive”.
Advertisement
Philip Hammond, the new chancellor, welcomed the deal after SoftBank guaranteed to keep ARM as an independently run business in Cambridge and double its United Kingdom workforce by 2020.
The recommended cash deal underlines the desire of SoftBank, which also owns struggling USA telecommunications company Sprint, to expand in the so-called “Internet of Things” – how home devices from smart-thermostats to security cameras and domestic appliances can connect online and work in sync.
“The problem with ARM is really whether it can generate the expected growth”, said Nakazora.
ARM centers its business on intellectual property, especially in mobile computing, rather than chip manufacturing, for which it relies on partners.
“This £24 billion investment would be the largest ever from Asia into the UK”, Hammond said in a separate statement. The corporate headquarters will continue to be based in Cambridge, England and they say the upper management will not change, but whenever there is a big sale it is only a matter of time before trusted Softbank executives are installed.
According to Bloomberg, ARM Chairman Stuart Chambers was vacationing off the coast of Turkey earlier this month and received a visit from Masayoshi Son, SoftBank’s billionaire founder and CEO, to discuss an acquisition.
A week ago, May pledged to devise a “proper industrial strategy” to defend British companies from being snapped up by foreign businesses, including firms in Britain’s pharmaceutical sector. Indeed, the company plans to pay £17 a share for the company – 43% more than ARM’s closing share price on Friday and 41% more than ARM’s all-time high closing share price.
It’s both a big bet on the “Internet of Things” and the first big deal involving a British company since the nation voted in June to leave the European Union.
TOKYO-SoftBank Group Corp.’s shares plunged Tuesday as investors questioned the $32 billion price tag on the company’s purchase of U.K.-based chip designer ARM Holdings PLC.
Advertisement
Son said he has been thinking of acquiring ARM for the past 10 years.
