Japan’s Softbank to buy mobile chip designer ARM Holdings for $32 billion

SoftBank said it intends to retain the current ARM organization including the existing senior management team, brand, and partnership-based business model and culture.

Softbank wants to nail the next technology paradigm shift.

The recommended cash deal underlines the desire of SoftBank, which also owns struggling USA telecommunications company Sprint, to expand in the so-called “Internet of Things” – how home devices from smart-thermostats to security cameras and domestic appliances can connect online and work in sync.

The announcement comes as an early test for Prime Minister Theresa May, who has vowed to defend British companies from foreign buyers.

British politicians have objected in recent years to some global takeovers including Pfizer’s failed bid to buy AstraZeneca and the successful move by Kraft to buy British chocolatier Cadbury.

He added: “Just three weeks after the referendum decision, it shows that Britain has lost none of its allure to worldwide investors”. Investment from SoftBank would allow “that future to be delivered sooner”, Segars said.

For $32 billion (a 43% premium to ARMH’s closing price Friday), Softbank gets the premium mobile-chip design house in the world.

LONDON, July 18 European shares slipped on Monday, as concerns over unrest in Turkey weighed on some travel and financial stocks exposed to the country, although tech stocks rose after a bid for Britain’s ARM. “It’s hard to see other suitors at this stage”.

Son, whose lucrative early investments include Alibaba, said then that he wanted to “cement SoftBank 2.0”, turn around loss-making Sprint and “work on a few more insane ideas”.

The move marks the Japanese telecommunications corporation’s desire to move into mobile internet opportunities. Beyond its sheer scale, the ARM acquisition is unusual for a company that had preferred to take control through hefty stakes in its companies.

Softbank’s interest in ARM is the first of its kind since the choosing of Nikesh Arora by the company’s chairperson Masayoshi Son to succeed him.

SoftBank had interest-bearing debt of 11.9 trillion yen at end-March.

However, it is not clear whether it will use the money to reduce debt or if it will give it to shareholders. Its shares have climbed about 17 percent since the vote.

But SoftBank has pledged to preserve ARM’s existing management team, maintain its headquarters in Cambridge, at least double the number of employees in the United Kingdom over the next five years and increase its overseas workforce too.

“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”, Mr. Son said in the statement.

To ease investor anxieties, SoftBank will have to clearly show what the company stands to gain from its latest megadeal.