ARM and Japan’s Softbank have announced a new deal which will see Softbank pay £24.3 billion to take over ARM.
Softbank will pay £17 a share in cash to take over ARM, this is a 43 percent premium on the company’s closing price last week.
ARM closed at £11.89 last week and it is trading at over £17 today since the markets opened. The company was founded 25 years ago and it employs 4,000 people.
Impact of Brexit on the Deal
With the recent Brexit vote, the pound has fallen some 30 percent against other currencies, this has made the acquisition of ARM more attractive due to the change in the exchange rate. The devaluation of the pound has effectively reduced the cost of the acquisition for Softbank, making it a more financially viable option. This currency fluctuation has played a significant role in the timing and attractiveness of the deal.
ARM’s Role in the Technology Sector
ARM is a major player in the smartphone market, the company licenses its chips to smartphone makers like Apple and Samsung. ARM’s technology is at the heart of most mobile devices, making it a critical component in the tech ecosystem. The company’s designs are known for their efficiency and performance, which is why they are favored by leading smartphone manufacturers.
In addition to smartphones, ARM’s technology is also used in a wide range of other devices, including tablets, wearables, and even some laptops. The company’s influence extends beyond consumer electronics; its chips are also used in automotive systems, industrial equipment, and IoT (Internet of Things) devices. This broad application of ARM’s technology underscores its importance in the tech industry.
Softbank’s Strategic Move
For Softbank, the acquisition of ARM represents a strategic move to strengthen its position in the technology sector. Softbank has a history of making bold investments in technology companies, and this acquisition aligns with its long-term vision of becoming a leader in the tech industry. By acquiring ARM, Softbank gains access to cutting-edge technology and a strong foothold in the rapidly growing market for mobile and IoT devices.
The acquisition also provides Softbank with an opportunity to leverage ARM’s expertise in chip design to enhance its own technology offerings. This could lead to new innovations and advancements in various fields, including telecommunications, robotics, and artificial intelligence.
Future Prospects
Looking ahead, the acquisition of ARM by Softbank could have significant implications for the tech industry. With Softbank’s resources and ARM’s technology, the combined entity could drive innovation and shape the future of mobile and IoT devices. This could lead to new products and services that enhance the way we live and work.
Moreover, the acquisition could also spur further consolidation in the tech industry, as other companies may seek to strengthen their positions through strategic acquisitions. This could lead to increased competition and innovation, ultimately benefiting consumers.
The acquisition of ARM by Softbank is a landmark deal that highlights the importance of technology in today’s world. With the combined strengths of both companies, the future looks promising for innovation and growth in the tech industry.
Source , Techmeme
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