U.K.-based ARM Holdings PLC Monday confirmed to accepted a buyout offer worth more than 24.3 billion pounds ($32 billion) from SoftBank Group Corp. The deal will improve the Japanese telecommunications giant’s portfolio in mobile internet.
The Japanese company agreed to pay 17 pounds per share (about $22.5 a share) in an all-cash deal. The offer presents a 43 percent premium on ARM Friday’s closing price. ARM shares jumped more than 45 percent in early trading on Monday.
“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,’” SoftBank Chief Executive Masayoshi Son said. “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,” he said.
ARM, whose headquarter is based in Cambridge, is the largest London-listed tech company by market value. ARM is trying to dominate the design of smartphone chips, which can be found in 95 percent of smartphones. ARM’s processor and graphics technology have been used by many big smartphone companies like Apple, Samsung and Huawei.
The deal is the biggest Japanese acquisition in Europe. This acquisition help SoftBank expand its presence in the growing internet of things (loT). According to Juniper Research, the number of loT connected devices will be 38.5 billion in 2020, compared with 13.4 billion in 2015.
The deal also came after the U.K.’ decision to exit the European Union, which made the companies in U.K. more attractive for overseas buyers as the depreciation of pound value. But Mr. Son said he wasn’t affected by Brexit considerations and lower pound “did not bring us any discount.”