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.
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The all-cash deal, worth the equivalent of US$32 billion or €29 billion, was unanimously backed by ARM management, the two companies revealed in a statement.
SoftBank plunged in early Tokyo trading today as investors gave a thumbs down to the Japanese mobile giant’s whopping United States dollars 32 billion purchase of British iPhone chip designer ARM Holdings.
He added: “The concern of brain drain and ARM business moving from the United Kingdom must be considered in this equation based on its know-how and leadership in chip design”.
Earlier this year, Cambridge-based ARM bought the United Kingdom imaging specialist Apical, which specialises in technology to allow computers to analyse images – replicating human vision using software.
SoftBank shares crashed to 5,387 yen (£38) on the Tokyo Stock Exchange on Tuesday – the lowest they’ve been in around four years – as investors struggled to make sense of the acquisition.
SoftBank meanwhile said it would offer £17 for each ARM share, a premium of around 43 percent compared with Friday’s closing price of £11.89.
The combined group hopes the acquisition will allow it to seize opportunities in the “internet of things” – giving everyday objects a connection to the internet. ARM’s processor and graphics technology have been used by many big smartphone companies like Apple, Samsung and Huawei. ARM should capture higher licensing revenue as the ARM architecture becomes more prevalent in non-mobile chip markets.
The Japanese company will retain ARM’s headquarters in Cambridge and plans to double the number of employees in the United Kingdom over the next five years, when it will also increase the company’s headcount outside the United Kingdom. Their microchip design has been mostly used for mobile phones, but now they might see their microchips embedded in whole new categories of household and business devices.
Shares in ARM Holdings jumped 42% following the announcement.
Britain’s new finance minister Philip Hammond praised the mega deal that comes amid warnings about a slowdown to growth in the country after its vote last month to exit the European Union.
Mr Son he was not driven to invest in ARM because of Brexit. “ARM is an outstanding company with an exceptional track record of growth”.
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ARM Chairman Stuart Chambers, said, “It is the view of the Board that this is a compelling offer for ARM Shareholders, which secures the delivery of future value today and in cash”.
