Softbank Acquires ARM in 24B GBP Dealby Joshua Ho on July 18, 2016 12:17 AM EST
While we normally focus on the technology, to have a holistic understanding of the industry it’s necessary to see the business side as well. While ARM has been an independent company for some time now, today Softbank has leveraged the fall in the value of the British Pound to buy ARM Holdings plc, the company responsible for the ARM ISA, ARM Cortex CPUs and MCUs, Mali GPUs, and numerous other IP blocks that are often used in SoCs today. If you’ve followed our coverage, this isn’t really a surprise, but Softbank is primarily a telecom and internet-centric company with relatively little focus on CMOS chip design.
ARM is valued at 11.89 GBP per share, so to be bought out at 17 GBP per share is a fairly significant premium above the market rate. Looking at past investments it seems that Softbank is no stranger to these kinds of plays but it’s not clear whether Softbank will take a hands-on approach to managing the company or mostly leave ARM to its devices. One option is that they favor a more hands-off approach and ARM is primarily a financial investment for Softbank. It remains to be seen what kind of effect this will have, but the financial backing of a major Japanese conglomerate would likely allow for ARM to devote additional time and resources to designing new architectures to better target high performance mobile and server applications which could impact the industry significantly to ARM’s benefit.
The other option is if Softbank takes a much more hands-on approach to managing ARM, which could be interesting if it helps root out whatever normalized deviance exists in management or engineering at ARM, but could also completely destroy the company if a poor approach is taken. Of course, there’s no way to know what path Softbank will take here, but regardless it’ll be an interesting few years in the semiconductor space.
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fallaha56 - Tuesday, July 19, 2016 - linkaccording to your reasoning, which isn't the same thing
there was a vote, people voted out, now vested interests will try any trick to stop democracy
in case other countries get the same idea
Cygni - Tuesday, July 19, 2016 - linkUnironically using the word 'cuck' in a comment on an article about fuckin' computer chips. Your life is really a trainwreck.
Alexvrb - Wednesday, July 20, 2016 - linkActually the article has little to do with "teh puter chipez" themselves. It's about binizz. Plus somebody started a nice brexit rant with a side of Teflon rearside-kissing action.
ats - Monday, July 18, 2016 - linkYou assume this won't be a pay bump into either retirement or doing their own thing.
bcronce - Monday, July 18, 2016 - linkThat difference in stock price is probably debt for the company. When my employer went from publicly traded to private, the private buyer offered well over the current stock price, but then all of that went directly into debt for the company.
ianmills - Monday, July 18, 2016 - linkFor tax reasons I guess. With a debt 43% of their value that's an awful lot of tax savings
jabber - Monday, July 18, 2016 - linkI shall be paying off 20% of my mortgage when I get the cheque.
pugster - Thursday, July 21, 2016 - linkIt is pretty strategy for ARM. ARM has the monopoly on how much they can charge per licensee, they could've charged twice and make twice the amount of money. Sprint is a dumb purchase because they are not the market share leader and went down even more after they purchased it.
jjj - Monday, July 18, 2016 - linkSoftbank to acquire* - it doesn't happen overnight.
SoftBank intends to:
preserve the ARM organisation, including ARM’s existing senior management team, brand, partnership-based business model and culture to ensure continuity of a strong track record;
maintain the headquarters of ARM in Cambridge;
at least double the employee headcount in the UK over the next five years thereby enabling ARM to continue to develop leading-edge technology in the UK; and
increase the headcount of ARM outside the UK over the next five years.
darkich - Monday, July 18, 2016 - linkThis seems like a good bet by Softbank..if only their financial position was enywhere near positive. They have just sold Supercell for $9B what looked like an urgent attempt to release some of the debt.