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July 18, 2016

Japan’s SoftBank to buy UK chipmaker ARM Holdings for £24bn

News: Combined group looking to fully capture Internet of Things opportunity.

By Ellie Burns

UK technology firm ARM Holdings has today confirmed that it is to be acquired by Japan’s Softbank for £24bn.

Fuelling a 45% surge in the company’s shares at the open of the London Stock Exchange, the deal will be funded by Softbank’s own cash reserves and a long term loan from Mizuho Bank. The £24 billion offer is around a 43% premium on its closing market value of £16.8 billion on Friday 15 July. 

Softbank has given assurances to ARM which include the preservation of the current ARM organisation, senior management and partnership based business model. In addition Softbank has pledged to at least double the employee headcount at the Cambridge-based company and also increase the headcount outside the UK over the next five years.

ARM, which designs microchips used in smartphones such as those made by Apple and Samsung, is expected to keep its headquarters in the UK.

Commenting on today’s Announcement, Stuart Chambers, Chairman of ARM 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.

"The Board of ARM 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. SoftBank has given assurances that it will invest considerably in the business, including doubling the UK headcount over the next five years and maintaining ARM's unique culture and business model. ARM is an outstanding company with an exceptional track record of growth. The Board 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.”

The deal is expected to position the combined group to fully capture the Internet of Things opportunity, while also proving that international businesses are still keen in investing in Britain post-Brexit. Pointing to the UK’s position as a leader in science and technology, Masayoshi Son, Chairman and CEO of SoftBank said:

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“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 investment also marks our strong commitment to the UK and the competitive advantage provided by the deep pool of science and technology talent in Cambridge. As an integral part of the transaction, we intend to at least double the number of employees employed by ARM in the UK over the next five years."

 

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