Softbank To Buy ARM Holdings (ARMH) For $32B

A huge acquisition just took place this week as Japan’s Softbank has agreed to purchase ARM Holdings, a gigantic semiconductor firm in the U.K. that supplies part of the chip design used in Apple’s iPhones.

The deal is worth more than $32 billion and will give Softbank a big chunk of the market in mobile processing. ARM is the largest London-listed tech company by market value and its processor and graphics technology are used by Samsung, Huawei, and Apple in their in-house microchips.

Most of the world’s smart phones have components based on technology that is licensed by ARM so this is a huge deal.

In the deal, Softbank will pay £17 per share (or $22.50 a share) for ARM, a 43 percent premium on Friday’s closing price, in an all-cash deal. In early trading on Monday, ARM shares exploded over 46%.

“This is a company I always admired for the last 10 years,” Masayoshi Son, chairman and chief executive of SoftBank, told reporters in London Monday. “This is the company I wanted to make part of Softbank. I am so happy”

According to Son, the deal will close quickly because Softbank “does not operate any competitive business against ARM. This will be very straightforward.”

Disclaimer: We have no position in ARM Holdings plc (NASDAQ: ARMH) and have not been compensated for this article.