SoftBank Group Corp., a Japanese multinational telecommunications and Internet corporation, with operations in broadband, fixed-line telecommunications, etc. is set to acquire U.K.’s ARM Holdings. Amount that will change hands during the acquisition is a whopping 32.2 Billion USD (or 24.3 billion Pound Sterling). Under the offer backed by ARM Holding’s board, SoftBank will pay 17 pounds for every ARM share – a premium of over 40% to Friday’s close. ARM shares surged nearly 43% to 16.99 pounds by 1350 IST.
ARM is a British semiconductor and software design company and is the largest London based company by market value. ARM chips are currently used in laptops, printers, etc. ARM’s graphic technology and processors are used by Apple, Samsung, Hewlett-Packard in their microchips. ARM has also diversified into other connected devices from cameras to cars as smartphone growth has relatively slowed down.
SoftBank’s Finances & Goals
This move by SoftBank is being seen a part of newfound interest by Japanese companies to expand their operations overseas. SoftBank has raised nearly 19 Billion USD over the last few months through asset disposals including sale of its shares in Alibaba. This decision is seen by analysts as a response to battered pound following Brexit and strengthening Yen. SoftBank has a interest-bearing debt of 11.9 trillion yen at the March end of this year.
“ARM will be the center of the Internet of Things, in which everything will be connected,” SoftBank CEO Mayayoshi Son told reporters. “Lot is going to be the biggest paradigm shift in human history (and) we have always invested at the beginning of every paradigm shift.” He further added, “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The acquisition is first for Son since he rescinded his retirement plans last month.