The bid for Arm, which is based in Cambridge will be the largest acquisition of a European technology business. The small chip company has brought giants like Intel to their knees in the realm of mobile phones and tablets, and now it’s on the verge of being acquired by Softbank for a stunning US$32 billion.
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SoftBank did make a public statement about the implications of the sale for ARM employees and UK residents, as ARM will still keep its headquarters in Cambridge UK, but with a 5-year plan to expand the number of employees, not just overseas, but in the UK, too.
New business secretary Greg Clark hailed the proposed deal as “a huge vote of confidence in the British economy”. “ARM has what we view as an unassailable library of IP processor designs based on chip performance, size and power performance”, Neil Campling, an analyst with Northern Trust Capital Markets, wrote.
The Japanese company agreed to pay 17 pounds per share (about $22.5 a share) in an all-cash deal.
“Around 50 per cent of the deals we are involved in at the moment are worldwide and we are certainly seeing increased appetite from Japanese buyers who are becoming ever more outward looking”.
SoftBank Group Corp.is a major telecommunications company that is essentially the creation of founder Masayoshi Son, who is chairman and CEO and said to be the second richest man in Japan.
The deal also came after the U.K.’ decision to exit the European Union, which made the companies in United Kingdom more attractive for overseas buyers as the depreciation of pound value.
“Just three weeks after the referendum decision, it shows that Britain has lost none of its allure to global investors”.
The British government also released a positive statement regarding the deal, saying it showed that Britain remains open for business.
Some of the many, many, many mobile device components that utilize ARM technology. Markets were closed in Japan for the Marine Day holiday on Monday. “Given the financial rules, I think it is hard for her to stop it, but if she wants an industrial strategy and a world-leading technology company, then she should try”. SoftBank would be able to provide a level of investment that ARM could not provide on its own, Segars said. On the conference call, Son said Sprint is becoming self-sufficient, and Sprint shares fell on the news.
ARM, the most valuable tech company listed in London by market value, is a major presence in mobile processing, with its processor and graphics technology used by Samsung, Huawei and Apple in their in-house designed microchips.
Son described the deal as a bet on the “Internet of things”, a new stage in the evolution of network technology, when cars, buildings, and household items may be connected through embedded electronics.
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“ARM is growing at 10 times the rate of the semiconductor industry it serves and is increasingly the glue that binds the disruptive forces of the entire digital world, not just $700 smartphones”. ARM is an outstanding company with an exceptional track record of growth. ARM Chairman Stuart Chambers said the agreement will be a plus for the company as SoftBank promised to invest in ARM and double jobs in the next five years. SoftBank plans on adding to the workforce outside of the U.K.as well.
