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

ARM Holdings, the UK company that licenses chip designs for mobile handsets to other companies such as Apple, Samsung and Qualcomm, will be acquired by Japanese telecommunications and Internet corporation Softbank Group for £24.5 billion ($32 billion) in cash (via Techcrunch). While the fall of the pound following the Brexit vote may have facilitated the buyout, Softbank also announced today that it has entered into a bridge loan deal for up to 1 trillion yen to help finance the deal.

While the acquisition will need to get regulatory approval to be completed, ARM Holdings is expected to stay an independent company and to keep its headquarters in Cambridge, UK. According to SoftBank Chairman and CEO Masayoshi Son, the Japanese company hopes this acquisition will make it a leader in the IoT field and the number of ARM employees is expected to double over the next five years:

We have long admired ARM as a world renowned and highly respected technology company that is by some distance the market-leader in its field.  ARM will be an excellent strategic fit within the SoftBank group as we invest to capture the very significant opportunities provided by the Internet of Things.

This investment also marks our strong commitment to the UK and the competitive advantage provided by the deep pool of science and technology talent in Cambridge. As an integral part of the transaction, we intend to at least double the number of employees employed by ARM in the UK over the next five years… 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.

Softbank wants to nail the next technology paradigm shift.

Stuart Chambers, Chairman of ARM echoed this ambition and shared that “The Board believes that by accessing all the resources that SoftBank has to offer, ARM will be able to further accelerate the use of ARM-based technology wherever computing happens.”

Softbank Group has made many high-profile acquisitions over the last few years: it became the owner of US carrier Sprint in 2013, and it also invested in mobile game studio Supercell the same year before selling all its shares to Chinese company Tencent for around $8.6 billion just a month ago. This last $32 billion acquisition easily tops Microsoft’s recent acquisition of LinkedIn for $26.2 billion, but we could well see other blockbuster deals in the technology landscape before the year ends.

Further reading: Acquisitions, ARM, ARM Holdings, Internet of Things (IoT), Softbank