SoftBank to acquire ARM for $32bn

This assumes there is no objection from the UK government. And that looks unlikely as Prime Minister Theresa May and Phillip Hammond, the new Chancellor of the Exchequer, have fallen over themselves to welcome the deal as a confirmation that the UK is attractive for investment post-Brexit.

So what is Softbank’s motive and what are its aspirations for the business?

Well, the core of Softbank’s business is in telecommunications and services - it owns Sprint and also acquired Vodafone’s Japanese business, so this acquisition gives it a new arm (excuse the pun) and the future ability to apply ARM’s technology to its own businesses. While ensuring it keeps ARM’s present customers onside.

It will, and it must look to continue ARM’s dominant position in the mobile market and make it the de facto standard in other application areas including automotive, IoT and servers. And just three months ago, ARM CEO Simon Segars was touting 5G and cloud computing as bolsters against a slowdown in the company’s core smartphone market.

These will not be easy markets to crack and will need plenty of investment.

There is opportunity in the IoT as there is no dominant processor technology. Ergo there will also be fierce competition.

On its own, ARM probably didn’t have the resources to go all out. Softbank, with its deeper pockets, offers a quicker route, and the Japanese company has already indicated it will double ARM’s UK workforce from the current 1,600.

This may be easier said than done. ARM employs extremely talented people and it is a great company to work for, but there is fierce competition for such people from other technology companies.