Japan's SoftBank plans to buy ARM for around $32 billion with the aim of becoming a leader in the IoT space.
SoftBank has reportedly agreed to acquire UK-based semiconductor giant ARM Holdings in a deal worth £23.4 billion (approximately $32 billion). According to FT, both the company’s boards have agreed to the deal, which could be announced later today. When this deal does go through, it will mark the biggest acquisition for a technology company in Europe.
While ARM doesn’t manufacture chipsets per se, it designs them and its chipsets are found in smartphones, consumer gadgets and more recently, a wide variety of Internet of Things (IoT) devices. In fact, some of ARM’s biggest clients include Apple and Samsung, and it relies on the royalty over each device these mobile companies sell. Last year, ARM shipped around 15 billion chipsets, of which, almost half were powering mobile devices. According to the report though, SoftBank’s idea behind acquiring ARM is to become a leader in the Internet of Things space.
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This isn’t the first time there have been talks about a possible acquisition of ARM. Apple, which is among ARM’s biggest clients, has been rumored to be planning on taking over the chipset company. Even Intel, which lost the mobile chip war to ARM, has been rumored to be among potential suitors.
The acquisition deal comes at a time when there is quite a bit of uncertainty in the UK over the whole Brexit saga. The British Pound is also feeling the pressure of the political scenario and is nearly 30 percent lower against the Japanese Yen over the past year. It is little wonder that SoftBank is seeing this as an opportunity to make the move. As per the report, the Japanese company will be paying £17 per share to ARM in a cash deal, which is a 43 percent premium to its closing price last week.
For SoftBank, this huge deal could shift some focus away from the recent exit of CEO Masayoshi Son’s heir apparent Nikesh Arora. Arora decided to quit SoftBank after Son’s announcement that he plans on continuing as the company’s CEO for another 5-10 years.