British chip designer and major Apple partner ARM Holdings is set to be acquired by Japanese firm Softbank for $31.4 billion, the BBC has revealed.
According to the report, the board of ARM is expected to recommend shareholders accept the offer, which amounts to a 43 percent premium on its closing market value of $22.2 billion last week.
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Shares in the U.K. technology firm surged by 45 percent at the open of the London Stock Exchange this morning on news of the deal, adding $10 billion to ARM's market value.
The Cambridge-based company was founded in 1990 and employs 3,000 staff. The acquisition is said to be the biggest ever purchase of a European technology company, one that will be funded by Softbank's own cash reserves and a long-term loan from Japan's Mizuho Bank. Commenting on the deal, chairman and chief executive of Softbank, Masayoshi Son, said:
This is one of the most important acquisitions we have ever made, and I expect ARM to be a key pillar of SoftBank's growth strategy going forward.
We have long admired ARM as a world renowned and highly respected technology company that is by some distance the market leader in its field. ARM will be an excellent strategic fit with the Softbank group as we invest to capture the very significant opportunities provided by the Internet of Things.
ARM designs the processors that power all of Apple's iOS devices, as well as most of Samsung's smartphones, and receives royalties on each chip made to its specifications. Last year over 15 billion ARM-designed processors were shipped, up 3 billion on the previous year.
Softbank is one of the world's biggest technology companies, having previously acquired Vodafone's Japanese operations and U.S. telecoms company Sprint. The latter $20 billion deal was the biggest foreign acquisition by a Japanese firm at the time.
Following the announcement of today's deal, ARM said it would keep its headquarters in Cambridge and double the number of its staff over the next five years. Softbank also intends to preserve the UK tech firm's organization, including its existing senior management structure and partnership-based business model.
Top Rated Comments
"Oh yeah? How much it cost you?"
"An ARM and a leg."
I'll let myself out.
And brit or not, there would be a problem of antitrust if Apple bought ARM.
[doublepost=1468843608][/doublepost]ARM doesn't make any chips.
And Apple does indeed make their own chips from scratch, do you even have a faint idea of what a Instruction Set Architecture is?
Apple licenses an instruction set known as ISA (Instruction Set Architecture) which is only a contract that says that if you compile your code to produce these instructions then the hardware will understand them.
In no way does the ISA enforce a certain implementation, you could implement it however you want.
Why did Apple choose this route? Simple: There are already a ton of compiler support (http://www.linaro.org/projects/armv8/) that can generate executables for ARM ISAs so no work on getting a compiler to generate the code.
Apple's chips are completely designed by them which is why you always see their chips kicking butt in single core tests.
So to finish: buy a license to an ISA, design your own chip so you can optimize it how you see fit, pay someone else to manufacture them.
Apple probably has what ARM calls a perpetual license which provides you with the rights to design and manufacture anything you want that is ARM-based perpetually, probably costs a nice and fat paycheck though.