SoftBank Group Corp. agreed to acquire ARM Holdings Plc in an all-cash deal valued at £24.3 billion. (US$32.4 billion), or 1,700 pence per ARM share, and representing a premium of 43% over the closing price on preceding trading day. The deal would be Softbank's largest to date.
SoftBank, which is based in Tokyo and is headed by Masayoshi Son, said it intends to preserve the ARM organization and business model, including ARM's senior management team and its headquarters in Cambridge, England. The companies said they intend to double employee headcount in the UK over the next five years.
ARM is the leading developer of RISC processor designs that are widely licensed for use in smartphones, tablets, laptops, desktops, embedded systems, and, increasing, servers. The company posted 2015 revenue of £968.3 million. A total of 14.8 billion ARM-powered SoCs shipped in 2015, up from just over 12 billion in 2014.
SoftBank will fund the acquisition with cash on hand and a load from Mizuho Bank of Japan.
“We have long admired ARM as a world renowned and highly respected technology company that is by some distance the market-leader in its field. 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,” stated Masayoshi Son, Chairman and CEO of SoftBank.
Regarding strategic rationale, both companies said they see big opportunities ahead with IoT.
ARM's next generation designs are expected to increase the number of processors per chip from a maximum of 8 today to 256 cores per chip.
- In July 2013, Softbank paid $22.2 billion for a 78% ownership interest in Sprint.
Specifically, the transactions are comprised of (i) the intended sale of $2.0 billion of Alibaba ordinary
shares to Alibaba, (ii) the intended sale of $400 million of Alibaba ordinary shares to members of the Alibaba Partnership acting collectively, and the sale of $500 million of Alibaba ordinary shares to a major sovereign wealth fund pursuant to an exemption from registration under the U.S. Securities Act and (iii) an intention to offer, subject to market conditions and other factors, $5.0 billion aggregate purchase price of its mandatory exchangeable trust securities exchangeable into American depositary shares of Alibaba in a private placement to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act.
After the sale, Softbank would continue to hold approximately 28%3 of Alibaba’s total outstanding shares.
“When I first met Jack Ma, I knew immediately he had the vision and passion to build the world’s leading e-commerce company, and I was very happy to invest alongside him to help him realize his ambition.” said SBG Chairman and CEO Masayoshi Son. “This investment has been phenomenally successful and, over the past 16 years, we have built a close relationship, working together on many exciting projects. In that time, we have not sold any Alibaba shares. There are huge opportunities ahead for Alibaba and SBG looks forward to the continued partnership.”