SoftBank to acquire ARM for A$42.3 Billion

ARM being acquired by SoftBank.

ARM2

Inside your phone is very likely a mobile processor that runs an ARM architecture. This technology has driven mobile devices in recent years  to the point where more than 15 billion of them
shipped with in 2015 alone. Today, one of the largest technology acquisitions has been announced, with Japanese-based telco SoftBank set to acquire ARM Holdings in the UK for a staggering £24.3bn which equates to $42.3 Billion in Aussie dollars or $US32.1 Billion.

The share market is loving the news with a 42.73% (and rising) jump in the share price of ARM today. When you understand the ARM design for chips live inside basically every device Samsung ships and Samsung is simply one of dozens of customers of ARM, you get a sense of the scale of this acquisition. Where Intel faltered, ARM excelled and through manufacturers like Qualcomm, the power efficient, multi-core design has been amazingly successful and left competition in the dust.

onq_aptx-audio-for-autos-feature

Of course mobile chips are just the start of ARM’s business, their products and IP will be found in embedded systems, microcontrollers, vehicles, TVs, smart watches, laptops, handheld gaming devices, GPS navigation, digital cameras and NAS devices.

Immediately this won’t have an impact on consumers, but it is noteworthy that ARM will essentially change ownership from the UK to Japan. SoftBank has made other important acquisitions, namely a 25% share in the Chinese online shopping giant Alibaba back in 2000. They also acquired a 77% stage in Sprint Nextel in 2013 for $22 billion, earlier this year, slammed down another US$4.5 Billion for 18% of Didi Chuxing, a Chinese transportation network, clearly not short of a dime.

SoftBank has 69,154 employees, easily subsuming the 3,300-odd employees of ARM. As with most acquisitions, it’ll take some time to play out. First to be officially approved by the shareholders of both publicly traded companies as well as the typical integration year of 2-3 years. On the other side of the acquisition, there will undoubtedly be cost saving opportunities with ARM holding offices and design centres across the globe, including California, Texas, Arizona and Washington in the United States; Bangalore and Noida in India; Trondheim in Norway; Lund in Sweden; Sophia Antipolis in France; Munich in Germany; Yokohama in Japan; China, Taiwan, Slovenia and Hungary.

ARM

Categories
Acquisitions