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Softbank closes its £24B cash acquisition of ARM Holdings

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Japanese major Softbank has finally finished with the acquisition of ARM Holdings. The deal was announced back in July. Apart from the fact that it had Softbank and ARM Holdings — both of them major corporations in their respective niches — at either ends, being the biggest tech deal in the UK, ever, gave it a huge publicity too. Softbank has now announced that the deal is finally done and all the papers have been signed.

As per an announcement on the Softbank website,

Pursuant to the terms of the Acquisition, SBG purchased all of ARM’s issued and to be issued shares (excluding any ARM shares already owned by SBG or an SBG subsidiary) for cash, for a total acquisition price amounting to approximately GBP 24.0 billion (approximately USD 31.0 billion or JPY 3.3 trillion).

That paves the way for ARM to be delisted from the London Stock Exchange as of September 6, 2016 (GMT). The organization will now cease to be a listed company and will instead, form a part of Softbank corporation. The companies have begun merging their respective finances today, and the financials and as well as the operational impact of the consolidation will be announced soon

Due to the changes in the relative value of the dollar as compared to the pound, the sum comes down to around $32 Billion — as opposed to $31 Billion back in July.

As is common knowledge, now most of SoftBank’s acquisitions that ran into tens of billions of dollars had revolved around communication — notably, its $20 billion Sprint acquisition and the $15 billion investment in Vodafone’s Japanese division. The ARM Holdings deal is being looked upon as Softbank’s attempt to make inroads into iOT, which is one of ARM’s chief forte, and a niche Softbank has been in to o, but needs more resources to excel. It’s not the first foray that the company has made in a sector that is strictly speaking, not particularly associated to what it does as a telecommunications major. 

The surging interest in iOT apart, many people were also of the opinion that Softbank took advantage of the drop in pound following the Brexit vote. If you remember, the pound fell significantly after a majority of the population voted for the UK to leave the European Union. However, Softbank chairman Masayoshi Son has already clarified his stand on the point,

Many people many are worried about Brexit and concerned about he complex situation of the country, but good or bad… I did not make the investment because of Brexit.

He also said that his company was unable to take any advantage of the fall in pound because of the rise in ARM share prices around the same time.

Meanwhile, with smartphone business exhibiting a flat curve as more and more markets reach saturations, ARM ‘s strategy finally seems to be nearing the verge of fruition — only, it will now be Softbank taking advantage of the careful plans that prompted ARM to shift its focus from smartphone to iOT, years before almost anyone else thought to venture into the field.

A bibliophile and a business enthusiast.

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