Saudis take £6bn stake in UK tech giant

by Sabah Meddings SAUDI investors are taking a 25pc stake in British chip designer ARM just six months after it was bought by Japanese firm Softbank.

It is understood Softbank, which bought ARM for £24bn in the summer, is placing a £6.6bn stake in the firm into its £82.2bn investment fund.

Billionaire Softbank boss Masayoshi Son is keen to attract international investment into his so-called Vision Fund, and this deal is seen as key to this.

Son wants to secure billions of pounds from Abu Dhabi-backed investment group Mubadala, in a bid to raise investment for innovation such as artificial technology and internet-linked household gadgets.

But if the deal, as reported in the Financial Times, is true it will give the Saudis increased influence over one of Britain’s brightest technology firms.

ARM designs microchips for vehicles, Apple iPhones, Galaxy smartphones and Amazon Kindle e-readers. It is also ploughing greater investment into the driverless car industry and is planning projects in robotics and automotives.

It was widely considered to be the jewel in Britain’s technology crown, and seen as key to Britain’s domination of connected devices.

While its sale to the Japanese was backed by the UK Government, it was widely criticised for letting yet another UK-owned company fall into foreign hands. The Government is believed to have been made aware of yesterday’s stake sale, although is not thought to have raised concerns.

It is thought the transfer of the stake into the Vision Fund was to appease investors, who want ARM to form part of its investments.

Softbank is putting about £20bn into the fund, with others expected to invest including Apple, Qualcomm, Oracle founder Larry Ellison and Taiwanese electronics manufacturer Foxconn.

ARM and Softbank declined to comment on the reported sale.

It is understood Mubadala is in talks with Softbank, and expects to make an announcement next week.

Mubadala, which did not respond to requests to comment from the Daily Mail, told the Financial Times: ‘We’re having ongoing, fruitful discussions over our participation in the fund.

‘ARM is certainly a strong technology company with great, continued potential. The Abu Dhabi group has been focused on growing its technology investments over the past decade, including in the semiconductor sector.’

Mubadala will invest as much as £12.3bn in the fund and should reach a formal agreement by the end of this month, according to reports. That would make it the second-biggest outside contributor after Saudi Arabia’s £37bn.

The deal will spark further questions about the loss of ARM to foreign owners, and coming so soon after Softbank’s purchase could raise concerns over its commitment to the UK.

When it bought the Cambridgebased firm, Softbank pledged to embark on a major recruitment drive while keeping its headquarters in the UK. But questions have been asked over the legality of that commitment – the promises are untested and there is no precedent for enforcing them.

News of the Softbank takeover came just after Britain voted to leave the EU, and Downing Street called it a vote of confidence in Britain. But at the time, ARM founder Hermann Hauser said he was ‘disappointed’ the company would no longer be Britishowned. ‘I still regret the fact we have lost our last independent high-tech company with a global reach,’ he said. ‘There was no reason for change. It had £1bn of cash and had got it right for the last 30 years.’

It will also throw Son’s investments into scrutiny.

In December Son pledged a $50bn (£41.1bn) investment in the US, which he said would create 50,000 jobs – a move US president Donald Trump said was a direct result of his election win.