ARM Holdings deal a ‘big bet’ on Britain
Japanese behemoth denies cheap pound was trigger for £24.3bn offer for UK tech giant ARM Holdings
The chief executive of SoftBank yesterday said his £24.3 billion takeover of ARM Holdings was a “big bet” on the UK thriving outside the EU, as he pledged to put Britain’s biggest technology company at the centre of the next computing age. Masayoshi Son denied that the Japanese acquisition of the microchip designer had been an opportunistic swoop enabled by the falling pound, as he pledged to hire thousands of engineers in the UK. Philip Hammond, the Chancellor, said it would be the biggest Asian investment in Britain.
THE chief executive of SoftBank yesterday said his £24.3bn takeover of ARM Holdings was a “big bet” on the UK thriving outside the EU, as he pledged to put Britain’s biggest technology company at the centre of the next computing age.
Masayoshi Son denied that the Japanese acquisition of the Cambridge based microchip designer had been an opportunistic swoop enabled by the falling pound, as he pledged to hire thousands of engineers in the UK.
ARM, which designs the microchips used in the iPhone as well as in millions of other smartphones, tablets and other computer electronics, announced yesterday morning that it had agreed to the shock £17-a-share takeover, which will be put to investors in the coming months.
Philip Hammond, the Chancellor, said it would be the biggest Asian investment in Britain, and showed that “Britain remains one of the most attractive destinations globally for investors to create jobs and wealth”.
Mr Son, who founded the Japanese internet conglomerate in 1981, promised to double ARM’s 1,600 employees in the UK over the next five years, keep its headquarters in Britain, and allow the company to invest heavily in designing chips for internet-connected cars, home appliances and wearable technology – the so-called “internet of things [IoT]”.
He said he had spoken to Theresa May and Mr Hammond on Sunday, and met the Chancellor in person yesterday before travelling to Cambridge for meetings with the company’s senior management.
“This is the company I wanted to make part of SoftBank,” he said. “ARM is a market leader and the next big paradigm shift is coming in IoT. I believe it will be a big opportunity for all of mankind and all the products in the world.”
Mr Son rejected suggestions that the deal – only negotiated over the last two weeks – had been a result of the pound’s fall after the EU referendum. While the drop in sterling’s value has made it cheaper for foreign buyers to acquire UK firms, Mr Son said buying the company had been a long-term ambition.
Sources familiar with the matter pointed out that the falling pound had boosted ARM’s share price since the vote, since the company books sales in dollars, making a deal more expensive for SoftBank. One source said the company was forced to raise its offer price three times to secure a deal.
“I know many people are concerned about this complicated political situation in the UK, some of my friends have businesses in the UK and they are terrified and discussing moving their headquarters,” Mr Son said. “I say this is the time we invest with a strong commitment and belief in the UK. It was not the currency – that was not the reason. The reason is I got the money finally. Saying the UK will be a great country is easy to say, I’m proving it with cash.”
SoftBank is financing the deal with a £7.3bn loan and £16.7bn in cash; money that has come from the recent sales of stakes in Alibaba and Supercell. It comes at a 43pc premium to ARM’s closing share price on Friday. Shares closed up 41pc yesterday at £16.75. Goldman Sachs and Lazards have advised ARM on the deal, with US advisers The Raine Group, London boutique investment bank Robey Warshaw and Japan’s Mizuho advising SoftBank.