Post Brexit, market and investors had written off for the companies based out of Britain. So, the news of acquisition of ARM by Softbank has come as a surprise to many and sigh of relief to British economy. The deal is pegged at $31.4 billion. Revenue of ARM in 2015 was $1.5 billion, so Softbank is shelling out about 25 times the revenue. In terms of share value, Softbank is paying 43% premium. The Cambridge based ARM was founded in 1990 and currently employs more than 4000 employees. ARM specialises in designing microchips for companies such as Apple and Samsung and has surpassed Intel in 2015 in terms of total chip sales.
Soft Bank believes ARM is one of the world’s leading technology companies, with strong capabilities in global semiconductor intellectual property and the “Internet of Things”, and a proven track record of innovation. As per Softbank, following are the five key benefits of this deal:
- Support and accelerate ARM’s position as the global leader in IP licensing and R&D outsourcing for semiconductor companies
- Maintain ARM’s dedication to innovation
- Increased investment to drive the next wave of innovation
- Shared culture and long-term vision
- Maintain and grow the UK’s leadership in science and technology
The fifth point deserves a bit of elaboration here. It’s rather odd for a Japanese Company (Softbank) to state that, it will maintain and grow UK’s leadership in Science and Technology.
As per BBC report, ARM’s founder Hermann Hauser has said “determination of what comes next for technology will not be decided in Britain any more, but in Japan”. Probably, Softbank wanted to pacify some of the disgruntled nationalistic British shareholders of ARM by stating, the deal will ensure UK’s leadership in science and technology. But in this global age, where technology is not confined by national borders, there was no need for Softbank to make the commitment of retaining UK’s leadership in science and technology.