Shares in Japan’s Softbank have fallen 10% after it agreed a controversial £24.3bn deal to buy United Kingdom microchip designer ARM Holdings.
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Michael Woodford, the chief executive of Japanese cameras giant Olympus who was sacked after exposing a massive fraud at the business, has declared SoftBank’s bid for ARM should be welcomed. Its future is actually far more promising as the mobile has made ARM a technology player worldwide.
ARM designs semiconductors and licenses its technology to chipmakers around the world.
But ARM Holdings founder Hermann Hauser said the proposed sale is “a sad day for me and for technology in Britain”, describing ARM has “the proudest achievement in my life”.
New chancellor Philip Hammond has welcomed the deal saying that despite the vote to leave the EU, Britain “has lost none of its allure to global investors”.
“My first impression was that the purchase made investors anxious about SoftBank being able to receive synergies from the purchase of ARM and collect all the cash it spent”, said Masayuki Kubota, chief strategist at Rakuten Securities.
As part of the deal, Softbank committed to doubling the number of ARM employees in the United Kingdom over the next five years. “Britain is open for business – and open to foreign investment”, Hammond said.
Masayoshi Son, chairman and chief executive of SoftBank, said the investment marked its strong commitment to the United Kingdom and the “competitive advantage” of the science and technology industries in Cambridge.
“The transaction represents the first major acquisition following the referendum and whilst the purchase doesn’t constitute a resounding vote of confidence in the post-EU U.K., it does illustrate that the after-effects of the Brexit have not deterred all parties from continuing with business as usual”, said David Cheetham, market analyst at XTB.
The deal is the biggest takeover of a British company since the country last month chose to leave the European Union and comes after the pound fell against the Japanese yen.
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The board of directors of processor intellectual property licensor ARM has recommended acceptance of a Softbank offer of £17 per share, which represnts a 43 percent premium over the share price at the close of trading on Friday July 15. Shares in ARM surged as much as 45% in London yesterday.
