SoftBank seeks entry to components sector with ARM acquisition

SoftBank pledged to invest in the future of ARM as it announced a £24.3 billion (€29.1 billion/$32.1 billion) bid to acquire 100 per cent of the UK-based technology company.

The Japan-headquartered company said the acquisition has the full backing of the boards of both companies, and will boost its capabilities in terms of global semiconductor IP and Internet of Things (IoT).

"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. 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'," Masayoshi Son, chairman and CEO of SoftBank, stated.

ARM's technology was included in chipsets with total shipments of 15 billion in 2015 making the company a central figure in smartphones and the broader consumer electronics markets, the Financial Times noted. SoftBank's bid will give the company a presence in the components market for the first time, building on its current telecoms and e-commerce holdings, Reuters reported.

SoftBank said its bid for ARM values the company at a 43 per cent premium to the closing share price of the UK company on Jul. 15. The Japanese company plans to maintain ARM's existing senior management team, brand, and partnership-based business model, and pledged to double the number of staff at ARM's UK headquarters in Cambridge over the next five years. The number of non-UK ARM staff will also be increased over the same timeframe.

Son said the investment "marks our strong commitment to the UK and the competitive advantage provided by the deep pool of science and technology talent in Cambridge." SoftBank "intends to invest in ARM, support its management team, accelerate its strategy and allow it to fully realise its potential beyond what is possible as a publicly listed company."

SoftBank noted that the acquisition must be cleared by ARM's shareholders and UK courts, and predicted that the acquisition will close during the third quarter of 2016.

ARM chairman Stuart Chambers said the company's board "is reassured that ARM will remain a very significant UK business and will continue to play a key role in the development of new technology."

The company's board also "believes that by accessing all the resources that SoftBank has to offer, ARM will be able to further accelerate the use of ARM-based technology wherever computing happens," Chambers stated.

For more:
- view details on SoftBank's webpage (disclaimer agreement required)
- read this Financial Times article
- see this Reuters report

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