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July 19, 2016

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Softbank purchases ARM for US$32b to expand in IOT

Source: AP | July 19, 2016, Tuesday | Print Edition

JAPANESE technology company SoftBank Group Corp is buying British ARM Holdings for 24.3 billion pounds (US$32 billion), in a deal the British government hailed yesterday as a vote of confidence in the country following last month’s vote to leave the European Union.

The recommended cash deal underlines SoftBank’s desire to expand in the so-called “Internet of Things,” which refers to how a multitude of home devices from smart-thermostats to security cameras and domestic appliances can connect online and work in sync.

ARM, which is the biggest-listed technology company in Britain, has a world-renowned reputation as an innovator in the IOT — its technology is used in most smartphones, for example.

“ARM will be an excellent strategic fit within the SoftBank group as we invest to capture the very significant opportunities provided by the Internet of Things,” said Masayoshi Son, chairman and CEO of SoftBank.

ARM centers its business on intellectual property, especially in mobile computing, rather than chip manufacturing, for which it relies on partners. Its technology is used in 95 percent of smartphones and 80 percent of digital cameras, according to the company. Augmented-reality headsets, biometric sensors, self-driving cars, commercial drones and smart watches all use ARM technology.

SoftBank said it intends “to at least double” the number of employees employed by ARM in the UK over the next five years. Cambridge-based ARM, which was founded in 1990, employs a little over 4,000 people worldwide, with 1,600 employed in Britain.

Philip Hammond, Britain’s new finance minister, said the deal shows that the country has “lost none of its allure to international investors” in the wake of the June 23 vote to leave the European Union.

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