The offer, announced on Monday morning, ranks as the biggest for a foreign takeover of a British technology firm and the largest ever Asian investment in the UK, coming at a 43pc premium to ARM’s share price on Friday. Shares rose 46 per cent when markets opened, reports The Telegraph.
ARM is seen as Britain’s most successful tech groups. It designs the microchips that power every smartphone and tablet on earth, including Apple’s iPhone, and is at the forefront of developing low-power chips for the “internet of things” – connected everyday household products.
SoftBank is a Japanese telecoms and technology conglomerate founded and run by the billionaire Masayoshi Son, which owns telecoms assets in Japan and has invested in the likes of Alibaba, Yahoo Japan and mobile games maker Supercell.
The deal comes less than a month after the vote to leave the EU. Although many companies saw their share prices fall heavily after the referendum, ARM – which books its sales in dollars – has benefited from the drop in the pound. While sterling has fallen against the yen, this has been outweighed by the rise in ARM’s share price since the vote.
The takeover of one of Britain’s biggest global technology success could also prove to be a political storm, just days after Theresa May became Prime Minister. Just two days before taking over at Number 10, May warned against foreign acquisitions of iconic British companies, citing Kraft’s purchase of Cadbury’s and Pfizer’s failed attempt to buy AstraZeneca.
But in an attempt to allay fears about the impact that a foreign takeover would have on a standard bearer for British innovation, SoftBank promised to double jobs in the UK over the next five years, that ARM’s headquarters would remain in Cambridge, and that its management team would stay on.
Philip Hammond, the Chancellor, welcomed the deal. “Just three weeks after the referendum decision, it shows that Britain has lost none of its allure to international investors. Britain is open for business – and open to foreign investment,” he said.
“SoftBank’s decision confirms that Britain remains one of the most attractive destinations globally for investors to create jobs and wealth. And as ARM’s founders will testify, this is the greatest place in the world to start and grow a technology business.”
Masayoshi Son said: “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’.
“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.”
The £17 a share offer – a significant premium to ARM’s £11.89 price on Friday – will have to be approved by 75pc of investors at a special shareholder meeting.
