Shares in Japan’s Softbank have fallen 10% after it agreed a controversial £24.3bn deal to buy United Kingdom microchip designer ARM Holdings. Some companies, like Apple, pay for the right to design original chips based on ARM technology.
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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.
“ARM has been the proudest achievement in my life, so it’s a very sad day for me personally and for technology in Britain”, Hauser, who is now a partner at Amadeus Capital, told ITV News.
SoftBank has pledged to keep ARM’s senior management team and headquarters in Cambridge, as well as at least doubling its United Kingdom workforce over the next five years. It employs more than 3000 people, and the chances are that the number will double after they will merge with Softbank.
“Britain is open for business – and open to foreign investment”, Chancellor of the Exchequer (equivalent title to Minister of Treasury or Finance) Philip Hammond was quoted by Bloomberg as saying.
Elsewhere, SoftBank’s U.S. outpost Sprint Corp saw its shares fall 5% on Monday amid concerns that it won’t get as much support from SoftBank in the future. “Britain is open for business – and open to foreign investment”, Hammond said.
But in Tokyo, investors in the Japanese firm gave the deal the thumbs down in Tuesday trading – with markets having been closed on Monday. It does not also seem likely that Softbank will be a major participant in an effort to combine T-Mobile US Inc (NASDAQ:TMUS) with Sprint, if that comes to pass.
Intel’s strategy has merits and strengths, but, “ARM has a totally different business model and different kind of strengths”, said SoftBank CEO Masayoshi Son on Monday. “Brexit did not bring us any discount”, he said. When asked if the sale of ARM to SoftBank indicated the company’s technology was running out of steam Segars said not at all.
ARM’s directors will recommend the deal is accepted by ARM shareholders.
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Investors remain concerned about SoftBank’s balance sheet and the hefty premium it’s forking over.
