SoftBank Switches on to IoT Hardware, Buys ARM for $32 Billion

Japanese investment and telecoms group SoftBank has agreed to pay some $32 billion (GBP 24.3 billion) for U.K.-based ARM. The company designs chips for phones and computers and is positioned as a leader in the so-called ‘Internet of Things.’

The move represents a massive bet for SoftBank on hardware and technology and a change of direction following the departure of high profile executive Nikesh Arora in June.

SoftBank has recently sold off or reduced its stakes in the content side of the media, Internet and entertainment sectors. Recently it sold its majority stake in mobile-game maker Supercell to China’s Tencent and trimmed its stake in Alibaba. It also sold its minority stake in Legendary Entertainment to China’s Wanda.

ARM is listed on NASDAQ in the U.S., but the deal represents another example of ‘Brexit,’ which sent the value of the pound tumbling, making U.K. companies cheaper as acquisition targets. Another Brexit deal last week saw the Odeon / UCI cinema chain agree to be acquired by Chinese-owned U.S. theaters group AMC. Softbank said that it will double the number of employees in the U.K. from ARM’s current 4,000.

“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,” said Masayoshi Son, chairman and CEO of SoftBank, in a statement. “This investment also marks our strong commitment to the U.K. and the competitive advantage provided by the deep pool of science and technology talent in Cambridge … 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.”

“The ARM board believes that by accessing all the resources that SoftBank has to offer, ARM will be able to further accelerate the use of ARM-based technology wherever computing happens,” said Stuart Chambers, Chairman of ARM, in a statement.

Philip Hammond, the U.K.’s new finance minister, said the deal would be the largest ever investment from Asia into the U.K. “Just three weeks after the referendum decision, it shows that Britain has lost none of its allure to international investors,” he said, according to U.K. media.

SoftBank previously bought U.S. cell phone company Sprint and  in 2006 acquired the Japanese mobile business of the European phone giant Vodafone.

 

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