ARM chip designer to be bought by Japan's Softbank


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SoftBank to Buy ARM Holdings for More Than $32 Billion

Both companies’ boards have agreed to the deal


Rick Carew in Hong Kong and

Ian Walker in London

Updated July 18, 2016 7:25 a.m. ET

HONG KONG—U.K.-based chip designer ARM Holdings PLC confirmed Monday that it agreed to a buyout offer worth more than $32 billion from SoftBank Group Corp. , marking a significant push for the Japanese telecommunications giant into the mobile internet.

The all-cash deal comes on the heels of SoftBank Chief Executive Masayoshi Son’s decision to take back the reins of the company’s investment strategy from his former deputy and designated successor, Nikesh Arora, who resigned in June.

“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,’” Mr. 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 said. ARM’s shares rose as much as 45% in Monday morning trading in London.

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


The ARM deal also comes less than a month after the U.K.’s decision to exit the European Union, a move that pushed down the value of the pound. That has made British companies potentially more attractive for buyers from overseas. But it also comes after a rally in ARM shares after the June 23 vote. ARM has very little sales in Britain itself.


In a press conference Monday in London, Mr. Son said he wasn’t affected by Brexit considerations and had only met ARM’s chairman for the first time two weeks ago—and after the Brexit vote.

Brexit “didn’t affect my decision” on pursuing ARM, he said. He said the recent drop in the pound after Britain’s referendum last month “did not bring us any discount.”

Philip Hammond, Britain’s Treasury chief, said early Monday he welcomed the deal in a statement. Mr. Son said he told Mr. Hammond that he would keep ARM based in England. About 1,600 of ARM’s 4,000-employee force is based in the U.K. Mr. Son said he pledged to British officials that he would double ARM’s U.K.-based workforce over the next five years.

Cambridge, U.K.-based ARM, whose microchip designs dominate the global processor market for smartphones including Apple Inc. ’s iPhone, boasts a strong portfolio of intellectual property for chips connecting mobile devices. While less vibrant demand for smartphones has weighed on ARM’s recent results, SoftBank is betting that its technology will be crucial to connecting devices ranging from smartphones to automobiles and appliances, according to a person familiar with the matter.

SoftBank also controls Sprint Corp. and has been cutting expenses to revive the No. 4 U.S. mobile carrier.



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'Sad day'

...  the co-founder of ARM Hermann Hauser said: "This is a sad day for me and a sad day for technology in Britain."

"ARM is the last British [technology] company that has a global reach," he said.

"It gave Britain real strength. It was a British company that determined the next generation microprocessor architecture."

ARM Holdings is arguably the most precious jewel in the crown of British technology, its microchip designs are used in billions of devices.


That allure has been boosted by the fall in the value of the pound since Brexit - making UK targets cheaper and many industry watchers are predicting a new wave of foreign takeovers.


Dan Ridsdale, analyst at Edison Investment Research, said "An increase in inbound merger and acquisition activity was one of the obvious consequences of Brexit and weakened sterling, but few expected it to manifest itself so quickly or at so large a scale."

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The Irrational One
Retired Staff
I don't know if this is a good thing or a bad thing.  

ARM has been growing considerably (especially with the "microcomputing" setups like RaspberryPi taking off), I'm hoping it'll remain a stable platform for all.

Anyone more knowledgeable about these kind of situations want to give their two cents?


Dormant VPSB Pathogen
I don't know if this is a good thing or a bad thing.  
That depends on whether Softbank extends the same baby bonus to its new UK ARM workers that it does to its Japanese workers. The baby bonus might help counter the effects of Brexit. 

On a more serious note, Softbank has $87 billion in annual revenues and turned a profit of over $4.6 billion last year so ARM is getting a parent with deep pockets who can invest in the business.  

A PC Magazine writer however thinks the merger is a bad idea and he does make some good points:

Softbank Buying ARM Is a Bad Idea for Everyone

ARM's perfect neutrality is a huge part of the success of mobile tech. Softbank's $32 billion purchase puts that in peril.
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Content Contributer
Not a big deal. There are contracts to ensure that the licence for the layouts are still in hands of the manufactures.

ARM is designing the ARM prozessors and other companies are using the layouts to build their SoCs. So not much will change as long as Softbank won't licence the new ARM chip versions.


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A PC Magazine writer however thinks the merger is a bad idea and he does make some good points:
He thinks Intel buying ARM would be a better solution? What could be further from neutrality!?

Softbank is probably as good a buyer as is likely in terms of preserving neutrality. I do not see any real logic to the deal though, for just that reason. No synergies.