Wednesday, July 20, 2016

SoftBank gets ARM as the biggest acquisition ever in Japan

SoftBank committed to gain the whole stock of ARM Holdings, a UK-based chip maker. The total price will 24 billion GBP. If carried out, it will be the largest deal for a Japanese company.

The Wall Street Journal: SoftBank to Buy ARM Holdings for $32 Billion

ARM provides nearly 95% of the microprocessors of the smartphones all over the world. Masayoshi Son, the founding CEO of SofrBank believes this deal as a cheap purchase, considering that there will be much more electric devices around us.

Indeed, Internet of the Things (IoT) is one of the keywords to interpret modern society. We will be able to connect almost everything to the internet to get relevant information. It means astronomical numbers of microchips will be needed in the near future. Son's perspective seems realistic.

However, his decision is not accepted by stockholders. The stock price of SoftBank fell by 10%. Usually, such big deals are not fully welcomed by the market. When Softbank bought Vodaphone and Splint, similar falling occurred.

ITProPortal: SoftBank shares drop following ARM acquisition announcement

On the other hand, the UK government approved this deal. IT officially said that this deal suggests the UK deserves to be a good candidate for investment. After Brexit vote, the UK is losing international presence. If the UK is purged from the EU financial market, it will become difficult for the UK to gain foreign currency. The acquisition of ARM represented an open attitude of the UK for a foreign entrepreneur.

I am not sure Son's decision will be successful. Recently, Son canceled the planned retirement. Even he has an extraordinary sense of business, whether it will be long-lasting is uncertain. I expect SoftBank will grow more up to a world famous company.

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