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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Drumsticks - Monday, July 18, 2016 - linkWow. That could be a pretty big pile of extra cash for a company that's already doing reasonably well, if they manage it right.
mkaibear - Monday, July 18, 2016 - linkThat's a pretty huge pile of cash for shareholders. Don't think any of that would go to the company...
JoshHo - Monday, July 18, 2016 - linkMany employees have options or are otherwise paid in equity, so this represents a considerable pay bump for them as well.
Samus - Monday, July 18, 2016 - link^ This. It will encourage a lot of employees to not jump ship after Brexit is finalized. Because let's face it, most intelligent people in Britain aren't for it for obvious reasons. This is just the right time for foreign investment to keep talent put.
timbotim - Monday, July 18, 2016 - linkIt has little to do with intelligence. It depends on whether the British people are cautious or adventurous. Currently, the UK is tilted 52:48 in favour of the latter.
Samus - Monday, July 18, 2016 - linkThe same can be said about the US being tilted closely in our current presidential race, when clearly only an ignorant, racist, bigoted or dangerously unstable individual would vote for the dangerously unstable candidate.
The same thing that happened in Britain could happen here if ignorant voters chose to tank our economy resulting in mass foreign purchases of our companies because of a weak dollar.
Hopefully Brexit was a wakeup call as to what will happen if one of our candidates succeeds in winning, but I have a feeling most of the people voting for that candidate don't even pay attention to what goes on outside of their own towns let alone their own country.
Murloc - Tuesday, July 19, 2016 - linkexcept that nothing has yet happened to GB so there is no wakeup call.
michael2k - Thursday, July 21, 2016 - linkExcept of course the value of their currency has fallen 25% since announcing the referendum and the subsequent vote.
IE, everyone in the UK got a 25% cut in pay in the last year, in terms of purchasing power of imported goods.
Alexvrb - Wednesday, July 20, 2016 - linkAnd clearly only a lying criminal would vote for the lying criminal. Now if you'll excuse me I have to go violate the law a few times (but with no intent, you see) and sell uranium to the Russians in exchange for donations to the Buy My Policy Foundation. Oh and I found these missing documents lying around the house...
I'd take almost any ol' maniac over her. Trump, Sanders, even Biden in a straightjacket would be better. Bring back Jimmy Carter! At least he gave a damn in his own way.
Samus - Monday, July 18, 2016 - linkBy the way, recent polls conducted today show overwhelmingly that the British would vote against Brexit. Unfortunately, like many mistakes in life, it is final and the damage is progressing, and nowhere near done.