SoftBank Group Corp has agreed to buy UK chip designer ARM Holdings PLC in a 24.3 billion pound ($32.2 billion) deal, the two companies said on Monday, in an ambitious bet on mobile internet that will transform the Japanese tech group.
ARM, the most valuable tech company listed in London by market value, is a major presence in mobile processing, with its processor and graphics technology used by Samsung, Huawei and Apple in their in-house designed microchips.
The Cambridge-based group also stands to be central to the tech industry’s shift to the ‘internet of things’ – a network of devices, vehicles and building sensors that collect and exchange data – a focus for SoftBank founder Masayoshi Son.
Monday’s deal, Softbank’s largest to date, marks a departure for the Japanese group, whose tech and telecom portfolio ranges from U.S. carrier Sprint to a stake in Chinese e-commerce giant Alibaba – but does not yet include a major presence in the semiconductor industry.
Under the all-cash, agreed offer, Softbank will pay 17 pounds for every ARM share – a premium of more than 40 percent to Friday’s close, in line with earlier news reports.
“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,” Son said in the statement.
The acquisition is also one of Japan’s largest to date, and is part of a trend of Japanese companies seeking growth abroad to compensate for a stagnant domestic economy.
It would outrank even SoftBank’s own $22 billion acquisition of a controlling stake in wireless operator Sprint in 2013 – a deal that left the Japanese group with hefty debts as the U.S. carrier’s losses mounted.
Softbank has raised nearly 2 trillion yen ($19 billion) in cash over the last few months through asset disposals, according to Son – including the sale of shares in China’s Alibaba, unusual for a group that has rarely exited investments.
Monday’s deal comes less than a month after Son, known as “Masa”, scrapped his plans to retire, effectively pushing out his heir apparent, former Google executive Nikesh Arora.