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SoftBank To Buy British Chip Designer ARM For $32 Billion (cnet.com)

Posted by msmash on from the big-money dept.

SoftBank has agreed to acquire British chip designer ARM Holdings for $32 billion in cash. The purchase will give Japan's multinational telecommunications and Internet corporation a slice of virtually every mobile computing gadget on the planet and future connected devices in the home. ARM, unlike Intel, doesn't manufacture chips, but licenses the design for it. ARM customers shipped roughly 15 billion products with ARM chips inside in 2015. This also marks the first large-scale, cross-border transaction in Britain since it voted to exit the European Union last month. "I have admired this company for over ten years," SoftBank Chief Executive Officer Masayoshi Son told reporters at a press conference in London on Monday. "This is an endorsement into the view of the future of the U.K."

ARM assumes the tentpole position in chips for mobile devices. It was one of the first companies to aggressively focus on mobile devices while other semiconductor companies were ramping up their efforts on desktops. SoftBank, which is based in Tokyo has become one of the most acquisitive companies in the recent years. It heavily invests in technology, media, and telecommunications companies. ARM could provide an additional boost to SoftBank's mobile strategy. SoftBank, for instance, also owns about 83 percent of the American wireless operator Sprint.
Hermann Hauser, one of ARM's founders, said, "ARM is the proudest achievement of my life. The proposed sale to SoftBank is a sad day for me and for technology in Britain." BBC's Rory Cellan-Jones asked, "Question -- if ARM goes, what's left as a worldbeating UK-owned tech player?"

12 of 153 comments (clear)

  1. Result of brexit? by NotInHere · · Score: 4, Interesting

    Did they use the cheap pound to shop a british company?

    1. Re:Result of brexit? by Anonymous Coward · · Score: 5, Informative

      No, TFA says that because most of ARM's revenue is in US$, its stock went up after the vote and it got more expensive for Softbank.

    2. Re:Result of brexit? by JDeane · · Score: 5, Interesting

      Maybe, but more importantly in my opinion what they plan to do with this, if they handle it correctly it's a great investment ARM CPU's are in a LOT of devices and if they can keep innovating they will be in many more and upgrades. If they just sit on it trying to collect money, Intel will eventually figure out how to make it's portable CPU's even better and eventually take the market. (Not that Intel's SoC's are bad now)

      Either way the next few years should prove interesting and we can use hindsight to see what they had in mind.

    3. Re:Result of brexit? by Feral+Nerd · · Score: 3, Interesting

      Did they use the cheap pound to shop a british company?

      Just days ago May made a stirring speech where she said No. 10 should be anle to step in if foreigners tried to buy companies important to British communities and workers. Now, apparently, No. 10 approved the sale to demonstrate conclusively that: "...the UK can make a success of leaving the EU". If making a success of Brexit means selling the UK high tech sector off to Asia in bits and pieces we are all going to have to re-examine our definition of 'success'.

    4. Re:Result of brexit? by Anubis+IV · · Score: 4, Informative

      Uh, no.

      The stock went up because of what Softbank offered, not the other way around.

      Actually, uh, yes, the stock went up exactly for the reason AC said, as well as for the reason you said. From the article:

      In fact, [SoftBank CEO Masayoshi Son] said because ARM’s sales are mostly to customers in the U.S. and Asia, and are largely dollar-denominated, its stock has risen about 15 percent since the EU referendum vote. That means the deal actually became more expensive for SoftBank because of Brexit, not cheaper, he said.

      ARM's valuation went up 15% after Brexit according to the article (just as AC said), and went up an additional 43% after news of the acquisition broke (just as you said), taking them to the price reported in the summary. The two are not mutually exclusive.

  2. Re:Who? by Big+Hairy+Ian · · Score: 4, Funny

    So long Acorn and thanks for all the chips

    --

    Build a Man a Fire, and He'll Be Warm for a Day. Set a Man on Fire, and He'll Be Warm for the Rest of His Life.

  3. Re:what about Intel and M$ by Richard_at_work · · Score: 3, Informative

    Microsoft already has Windows 10 IoT Edition, which runs on the Raspberry Pi 2 & 3, and other small systems.

  4. Re:Who? by RogueyWon · · Score: 3, Interesting

    Could be worse, they could have been bought out by a Chinese chicken-supplier.

    Softbank may not be well known to the Western public, but it is at least an institution with a genuine track-record and a long-standing interest in the tech sector. Some of these Chinese acquisitions recently feel like attempts to manipulate China's tax or criminal codes and I worry for the future of the companies which have been acquired.

  5. Softbank by sjbe · · Score: 4, Informative

    Company I've never heard of buys most important processor company in the world. Wow.

    Softbank is one of the 100 largest companies in the world. You not knowing them speaks more to your ignorance of Japan than anything else. They've been a big player in the tech world for decades.

    And Intel might disagree about who is the most important processor company in the world though ARM certainly has an argument for the title. ARM is king of the hill in mobile devices but changes are you typed your posting on a device with an Intel microprocessor. Which is more important? Guess that depends on your point of view.

  6. Meanwhile in ARM's Cambridge HQ by TechyImmigrant · · Score: 5, Funny

    The Softbank CEO walk in and asks "So where are your factories?"

    --
    I should use this sig to advertise my book ISBN-13 : 978-1501515132.
    1. Re:Meanwhile in ARM's Cambridge HQ by Junta · · Score: 4, Insightful

      The sad things is that businesses by and large *hate* any hardware portion of a business. So they're perfectly happy to have a pure IP company that licenses out to companies that in turn are generally *also* fabless. The more they 'saddle' some other sap with the capital intensive business of building and moving real physical goods, the happier they are.

      --
      XML is like violence. If it doesn't solve the problem, use more.
  7. Re:Who? by slew · · Score: 3, Informative

    I get the impression that it's kind of like the Verizon of Japan, except maybe with an even larger market share. I believe they own Sprint in the U.S., too.

    Like Yahoo, Softbank appears to be valued most by it's Alibaba holdings. The market value of the shares of it's top 5 holdings is worth $22B more than the market value of the company. Interesting, they recently purchased Sprint for about $22B... But unlike Yahoo, Softbank's own telecom business is actually profitable...

    Apparently, they recently sold off some of their Alibaba holdings (~5% of 32% for +$9B) and all of SuperCell (70% +$8B) to help finance this ARM acquisition, but most observers believe it will almost certainly require taking on more debt given the amount of cash on hand...

    As a result, the shares of Sprint have been impacted as it looks like they won't get all the cash infusion they need to turn around their business...