Japan’s Softbank said on Monday that it will buy British semiconductor company ARM Holdings for about 31 billion US dollars, the largest ever purchase of overseas business for the telecoms giant.
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Following the announcement of the SoftBank deal, Arm Holdings shares have risen as much as 45% in trading Monday morning in London.
SoftBank Group is stepping up its “leveraged management” strategy with its purchase of British semiconductor designer ARM Holdings, the biggest acquisition of an overseas business by a Japanese company. “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”, said Masayoshi Son, chairman and CEO of SoftBank, in a statement.
Prime Minister Theresa May said the deal between Softbank and ARM Holdings showed the United Kingdom economy could be successful after the country voted to leave the European Union.
Analysts said the vast weakening of the pound, in particular against the dollar, since the referendum result is making British companies attractive for foreign groups.
SoftBank will pay £17 in cash for each share in ARM, a 43% premium to its closing price last Friday.
The stock price of ARM surged more than 40% to $66.22 per share in around 12:51 in the afternoon in NY. It has also said it will keep ARM’s headquarters in Cambridge, England, and to increase employment in the United Kingdom from approximately 1,700 to approximately 3,000 over the next five years. He has focused on what he calls the next “paradigm shift” in technology, which includes artificial intelligence and the internet of things – both increasingly important for ARM as it weathers a smartphone slowdown.
This deal has been announced less than a month after Masayoshi Son, founder of SoftBank, canceled his plans to quit the company, stating that he wanted to develop Sprint and complete the transition of SoftBank into an internet investment powerhouse.
Mr Son he was not driven to invest in ARM because of Brexit.
“This investment 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”.
ARM is well known for the A-series processors it designs for Apple’s iPhone and iPad lineup, and it’s the company behind the processors inside many Android-based smartphones.
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Experts have cautioned the takeover could lead to “brain drain” if ARM Holdings businesses were moved out of the UK. Investment from SoftBank would allow “that future to be delivered sooner”, Segars said.
