Softbank Acquires ARM in 24B GBP Dealby Joshua Ho on July 18, 2016 12:17 AM EST
While we normally focus on the technology, to have a holistic understanding of the industry it’s necessary to see the business side as well. While ARM has been an independent company for some time now, today Softbank has leveraged the fall in the value of the British Pound to buy ARM Holdings plc, the company responsible for the ARM ISA, ARM Cortex CPUs and MCUs, Mali GPUs, and numerous other IP blocks that are often used in SoCs today. If you’ve followed our coverage, this isn’t really a surprise, but Softbank is primarily a telecom and internet-centric company with relatively little focus on CMOS chip design.
ARM is valued at 11.89 GBP per share, so to be bought out at 17 GBP per share is a fairly significant premium above the market rate. Looking at past investments it seems that Softbank is no stranger to these kinds of plays but it’s not clear whether Softbank will take a hands-on approach to managing the company or mostly leave ARM to its devices. One option is that they favor a more hands-off approach and ARM is primarily a financial investment for Softbank. It remains to be seen what kind of effect this will have, but the financial backing of a major Japanese conglomerate would likely allow for ARM to devote additional time and resources to designing new architectures to better target high performance mobile and server applications which could impact the industry significantly to ARM’s benefit.
The other option is if Softbank takes a much more hands-on approach to managing ARM, which could be interesting if it helps root out whatever normalized deviance exists in management or engineering at ARM, but could also completely destroy the company if a poor approach is taken. Of course, there’s no way to know what path Softbank will take here, but regardless it’ll be an interesting few years in the semiconductor space.
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Ariknowsbest - Monday, July 18, 2016 - linkThe sell of Supercell is more or less a typical VC exit. It was a good time to sell to Tencent.
I think it will be good deal for both companies. Imagination Technologies jumped by 10 % already it wouldn't be surprised if somebody makes a play for them as well.
Amandtec - Monday, July 18, 2016 - linkBanks have the wrong culture to own an innovation driven company.
- Focus on governance over ideas.
- Focus on earnings over research.
- Focus on the past over the future.
kingpotnoodle - Monday, July 18, 2016 - linkSoftBank is NOT a banking corporation, they are telecoms and internet.
jordanclock - Monday, July 18, 2016 - linkI dunno, dude. It has Bank in its name. He might be onto something.
ianmills - Monday, July 18, 2016 - linkWell it's a softbank... Being softcore will make it more innocent I bet
Impulses - Tuesday, July 19, 2016 - linkI giggled...
The Japanese are all about fan service anyway.
A5 - Monday, July 18, 2016 - linkSoftbank isn't a bank. They operate a number of telecom companies, including Sprint.
JHBoricua - Monday, July 18, 2016 - link@Amandtec - You probably should've researched what SoftBank is. Here's a hint: It is not a bank.
Alexvrb - Wednesday, July 20, 2016 - linkI thought they stored software in a vault for safekeeping!
tipoo - Monday, July 18, 2016 - linkI'm applying cautious optimism here, potentially a good way for ARM to get the funds to compete in the larger silicon die spaces, i.e bolster their server push with larger higher IPC chips, though on the other hand I hope it's not a case of a big company buying another one and messing up the whole management structure, then selling them off a shell of what they used to be.
ARM was managed very well on their own, I hope they retain management control.