Intends to invest in multiple ARM growth initiatives, at least doubling the number of ARM employees in the UK over the next five years
Japan’s SoftBank Group (SBG), a multinational telecommunications and internet firm, and Cambridge, UK-based semiconductor firm, ARM have announced that on 18 July they reached agreement on the terms of a recommended all-cash acquisition of ARM by SBG, under which SBG will acquire 1,412 million shares of ARM with a total acquisition price amounting to approximately £24 billion (approximately $31 billion or JPY 3.3 trillion).
The acquisition, which has been approved at a meeting of SBG’s board of directors, is subject to the approval of ARM’s shareholders and of the English court. ARM’s board of directors has unanimously confirmed that it intends to recommend the acquisition to ARM’s shareholders.
The companies expect the closing of the acquisition to occur as soon as practicable in the third calendar quarter 2016 (the period ending 30 September 2016). As a result of the acquisition, ARM will become a wholly-owned subsidiary of SBG.
SBG believes ARM is one of the world’s top technology companies, with strong capabilities in global semiconductor intellectual property and the Internet of Things (IoT), and a proven track record of innovation. The board and management of SBG have evaluated ARM in detail and after careful consideration, unanimously support this transaction.
The board and management of SBG believes that the acquisition of ARM will support and accelerate ARM’s position as a global leader in intellectual property licensing and R&D outsourcing for semiconductor companies. Also that SBG’s deep industry expertise and global network of relationships will accelerate adoption of ARM’s intellectual property across existing and new markets.
SBG intends to sustain ARM’s long term focus on generating more value per device, and driving licensing wins and future royalty streams in new growth categories, specifically enterprise and embedded intelligence.
The buyer also intends to support ARM’s multiple growth initiatives by investing in engineering talent and complementary acquisitions, with the aim of ensuring ARM maintains a R&D edge over existing and emerging competitors. SBG believes such an investment strategy in long term growth will be easier to execute as a non-listed company.
Additionally, SBG is investing in the UK as a world leader in science and technology development and innovation and, as evidence of this, intends to invest in multiple ARM growth initiatives, at least doubling the number of ARM employees in the UK over the next five years.
Masayoshi Son, chairman and CEO at SBG, said: “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.
“SoftBank intends to invest in ARM, support its management team, accelerate its strategy and allow it to fully realise its potential beyond what is possible as a publicly listed company,” continued Son. “It is also intended that ARM will remain an independent business within SoftBank, and continue to be headquartered in Cambridge, UK. 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.”
Stuart Chambers, chairman at ARM, said: “It is the view of the board that this is a compelling offer for ARM shareholders, which secures the delivery of future value today and in cash. The board of ARM is reassured that ARM will remain a very significant UK business and will continue to play a key role in the development of new technology.”
Chambers continued: “SoftBank has given assurances that it will invest considerably in the business, including doubling the UK headcount over the next five years and maintaining ARM’s unique culture and business model. 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.”