Softbank to Acquire Britain's ARM for 3.3 T. Yen

Tokyo, July 18 (Jiji Press)--Japan's Softbank Group Corp. <9984> said Monday it has signed an agreement with ARM Holdings PLC to buy up the leading British chip technology firm for some 3.3 trillion yen. Under the agreement, one of the largest overseas acquisition deals clinched by Japanese companies, Softbank plans to buy all 1,412 million outstanding and fresh shares in ARM at 17 pounds apiece by Sept. 30 to make the chip designing firm a wholly owned subsidiary. The total acquisition cost will reach 24.3 billion pounds. To complete the all-cash buyout deal, Softbank will take out one-trillion-yen bridge loans from Mizuho Bank. ARM designs semiconductors for smartphones and tablet computers and licenses its technology to major chipmakers. It is particularly strong in the smartphone chip field, as ARM's technology is seen used in 95 pct of such chips across the globe. The Cambridge-based firm logged sales of about 968 million pounds last year. Softbank also agreed to keep the ARM senior management team unchanged, and to at least double the employee headcount in Britain and increase it outside the country over the next five years. The ARM acquisition will give Softbank a "very big opportunity" to take a lead in the "Internet of things" business, said Softbank Group Chief Executive Masayoshi Son at a press conference in London. ARM is a perfect winner in the smartphone sector, he stressed. Softbank procured some 2 trillion yen in a short period by, among other moves, selling part of shareholdings in Chinese e-commerce giant Alibaba Group Holdings Ltd. Initially, it explained that the procured funds would be used to improve its fiscal health. But the pound's sharp drop against the yen in the wake of Britain's vote to exit the European Union in the referendum last month has made ARM an attractive buyout target for Softbank in terms of price, people familiar with the matter said. But Son denied this view, saying the ARM share price rather rose. END