SoftBank to Buy ARM Holdings for More Than $32 Billion

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SoftBank

Tokyo company SoftBank Group Corp. has agreed to a buyout of the U.K. tech giant ARM Holdings PLC that may enable the Japanese telecommunications  giant to emerge as a leading body in one of the next big tech markets, the mobile internet.  The deal has been closed for an amount said to be close to 32 Billion Dollars (around 24 Billion Pounds) and is one of the largest ever all-cash buyouts in the history of tech-business. SoftBank will pay £17 in cash for each share in Arm, a 43 percent premium to its closing price last week.

The deal comes from the chairman of SoftBank, Masayoshi Son, only weeks after the departure of Nikesh Arora who was Son’s chief dealmaker and designated successor, from the company.

“ARM will be an excellent strategic fit within the SoftBank group as we invest to capture the very significant opportunities provided by the ‘Internet of Things,’ ”Son said. “This is one of the most important acquisitions we have ever made, and I expect ARM to be a key pillar of SoftBank’s growth strategy going forward,” he added.

The Japanese company said it would double the employee strength in the region over the next five years. It also plans to increase headcount outside the U.K.

ARM, which was founded in 1990, employs more than 3,000 people. The Cambridge-based firm designs microchips for an array of mobile phone devices including Apple’s iPhone.

The ARM deal also raises questions about the effects of the U.K.’s decision to leave the European Union, having emerged less than a month after BREXIT. A resultant drop in the value of the sterling pound has left the UK currency nearly 30 percent lower against the Japanese yen over the past year, making Arm an attractive target to foreign investors. British Prime Minister Theresa May has already put out a word of caution against foreign takeovers of U.K. companies due to this. But ARM seems to be less vulnerable to these consequences for being in a key role in the chip industry and also for the fact that it earns in U.S. Dollars.

Philip Hammond, the U.K.’s new Chancellor of the Exchequer, said Softbank’s investment would be the largest ever investment to come from Asia into the U.K., pointing to the fact that “Britain has lost none of its allure to international investors”.

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