Softbank set to acquire British microchip manufacturer ARM for £24bn, according to numerous media reports.
ARM shot to prominence by landing the deal to design the microchips in Apple’s hugely popular iPhone devices. Softbank is a giant in the world of telecoms owning a number of foreign subsidiaries including distributor Brightstar and US operator Sprint.
It’s been suggested that the takeover is being driven by the potential that exists in the ‘Internet of Things’ (IOT) market. The deal would certainly place Softbank in a strong position should this sector develop as expected, with a range of business with different stakes in IOT.
It’s an interesting time to acquire a chip designer, the microchip market has become very competitive in recent years with the likes of ARM, Qualcomm and Mediatek facing a challenge of from mobile manufacturers making their own chips. The gradual slowdown of the smartphone market is also slowly having an impact on profits.
UK market decision
The deal places new British Prime Minister Teresa May in an interesting situation. Having stated that the Government would be examining whether foreign takeovers were right for Britain she is been immediately faced with a decision with one of Britain’s most successful technology business’.
All of this comes amidst an atmosphere of concern about foreign investment in Britain following the vote to leave the EU.