United Kingdom -based ARM Holdings PLC Monday confirmed to accepted a buyout offer worth more than 24.3 billion pounds ($32 billion) from SoftBank Group Corp.
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SoftBank, which also owns USA telecommunications vendor Sprint, has been looking to expand into the IoT and ARM’s intellectual property works not in just smartphones (its technology is used in 95% of smartphones) but also digital cameras, augmented reality, biometric sensors, drones, smart watches and much more. SoftBank said its offer represents a 43 percent premium to ARM’s closing share price on Friday.
ARM Holdings, a British chip designer company, is going to be bought by Softbank Group, a Japanese telecommunications giant, for £24bn. Japanese technology company SoftBank Group Corp.is buying British semiconductor company ARM Holdings for $31 billion.
But it had more than $100 billion in debt at the end of March.
Under the agreement, Softbank will acquire 1.41 billion shares of ARM with a total acquisition price amounting to approximately 3.3 trillion yen (about 31 billion US dollars).
Conservative British Prime Minister Theresa May declared that the record Asian investment proved “Britain is open for business”, just three weeks after citizens voted to leave the European Union. While the deal’s potential ramifications could be complicated – with a new owner of ARM’s vendor-neutral IP potentially affecting large businesses of key partners including Apple, Qualcomm, Samsung, TSMC and others – we believe the relatively neutral stance of Softbank makes the acquisition more palatable to key licensees.
Linley Gwennap, an analyst at the Linley Group, said, “If you are Intel, that potentially makes ARM even more potent as a competitor”. And Masayoshi Son, chairman and chief executive of SoftBank said in a statement: “We have long admired ARM as a world renowned and highly respected technology company that is by some distance the market-leader in its field”.
The company – often described as China’s equivalent to eBay – dominates online commerce in the country.
Then Autonomy was swallowed up by HP in an ill-fated deal, past year the chipmaker Qualcomm bought CSR, and now the biggest and best, ARM, is about to have a Japanese owner. The deal will require further regulatory approval.
However, the benchmark Nikkei 225 index was up 0.47 percent, or 78.32 points, at 16,576.17 by break, while the broader Topix index of all first-section shares gained 0.32 percent, or 4.28 points, to 1,321.38.
It also doesn’t hurt that the yen is strong and the pound is weak-thanks, Brexit.
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On the forex market, the dollar eased to 105.84 yen in Tokyo, from 106.14 yen in NY. That’s why we thought it was about time to go shopping. The shares rocketed 23 percent at one stage Tuesday. The takeover price is 56 times ARM’s pre-tax profits past year.
