How Softbank bet big on ARM takeover
Japanese billionaire pulls off Europe’s biggest-ever technology deal
Just two weeks separated Masayoshi Son’s private jet flying to the Turkish resort of Marmaris to court Stuart Chambers, ARM Holdings’ chairman. and his company SoftBank announcing Europe’s biggest-ever technology deal, but the Japanese billionaire has never been known for his patience.
At 16, when Masa — as he is now affectionately known — moved from Kitakyushu in south-west Japan to study in San Francisco against his mother’s wishes, he managed to skip three years of high school by taking the college entry exam in three weeks. The young student convinced his teachers to bend the rules and let him use a Japanese-English dictionary, and give him extra time for the three-day test, he stayed past 11pm finishing it each night, much to the annoyance of the examiner.
But by 20, he had graduated and sold his plans for a pocket language translator to Sharp for $1 million (Dh3.67 million).
Four years later, when Son moved back to Japan and founded his company, he had just two part-time workers. But on its first day, he stood up on two boxes and made his voice boom across the office, as if addressing a stadium of fans.
Son, a third-generation Korean immigrant born in a remote Japanese city, has never been one for the small time. Thirty-five years on and with a net worth of over £20 billion, Son has lost none of his drive, as the mogul demonstrated last week with the shock £24 billion bid for ARM, the microchip designer whose inventions power the iPhone.
“This is the company I wanted to do for so many years, our most important [deal], my big bet for the future,” he proclaimed. The agreement appeared ludicrous by some standards. Wrapped up in days, the price — £17 a share — came at an enormous profit multiple. But in the world of Masayoshi Son, it was just another step on his charge to making SoftBank not only the biggest tech company in Japan, but one day, the world. Today, SoftBank — in its early days a computer software seller — is a sprawling conglomerate worth 6.5 trillion yen (£50 billion). The company runs one of Japan’s biggest mobile networks and owns a 36pc stake in Yahoo Japan, a separate entity from its US namesake and Japan’s second-biggest website.
In 2013, it bought an 80 per cent stake in American mobile network Sprint in a bold attempt to challenge the dominance of Verizon Wireless and AT&T. When Son announced the deal, he outlined a vision in which every household appliance, every car and every robot has an ARM-branded chip in it.
“It will be a big opportunity for all of mankind,” he said. Who would bet against him?