ARM looks to future with its acquisition by Softbank
LONDON—ARM Holdings plc has agreed to be bought by Softbank of Japan for £24.3 billion (about $32.25 billion) in an all-cash deal.
The board of directors of processor intellectual property licensor ARM has recommended acceptance of a Softbank offer of £17 per share, which represents a 43 percent premium over the share price at the close of trading on Friday July 15.
As part of the deal Softbank has pledged not to change ARM's successful partnership business model, culture and brand. It has also said it will keep ARM's headquarters in Cambridge, England, and to increase employment in the UK from approximately 1,700 to approximately 3,000 over the next five years.
SoftBank plans to finance the deal through a combination of debt and cash on hand.
ARM CEO Simon Segars said in a video interview posted on the ARM website hat the deal was good for ARM because the two companies have a common view of the future of technology and the need for rapid investment in R&D and engineering for developments such as the Internet of Things and autonomous automobiles. SoftBank would be able to provide a level of investment that ARM could not provide on its own.
Segars added that ARM's strategy would not change in the short term and that the senior management, including himself as CEO, would remain in place. When asked if the sale of ARM to SoftBank indicated the company's technology was running out of steam Segars said not at all. He said the 90 billion chips that ARM technology is embedded in was only the beginning of a networked information technology revolution that could take decades. Investment from SoftBank would allow "that future to be delivered sooner," Segars said.
The rise of SoftBank
SoftBank Group Corp. is a major telecommunications company that is essentially the creation of founder Masayoshi Son who is chairman and CEO and said to be the second richest man in Japan.
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