Softbank is not buying a ‘Brexit bargain’ – ARM chip designer to be bought by Japan’s Softbank



Tom Rebbeck, Research Director, and Head of IoT and M2M at Analysys Mason, (global telecoms advisers) comments on the news that Softbank is to acquire UK’s Arm Holdings.

  • Softbank is not buying a ‘Brexit bargain’. The increase in ARM’s share price post-Brexit has offset the fall in Sterling. Assuming the same 43% premium, Softbank would have paid JPY3.1tr on February 19 2016, the day before the EU referendum date was announced, compared to the actual price of JPY3.3tr. The price in USD would have been more than USD4bn lower in February. Brexit hasn’t made ARM a bargain for Softbank.
  • IoT is central to the acquisition. Masayoshi Son, chairman and chief executive of Softbank, cited IoT as central to the acquisition: “ARM is going to be everywhere in internet of things”. The automotive market, in particular, appears to be a focus: “when automobiles become so smart… the automobile itself will become a super computer… ARM will be going into this market very very aggressively.”
  • It’s a surprise. Before today, we would not have included Softbank in a list of ten companies that might buy ARM; ARM is not an obvious fit with any of its other businesses (telecoms, software, device distributors, etc.), but is consistent with Softbank’s widely varying portfolio of assets.
  • Analysys Mason does not expect the ARM acquisition to affect Softbank’s telecoms assets. Softbank has a history of managing assets separately, and ARM will run as an independent unit. ARM’s position is a long way from telecoms operators in the IoT value chain. We don’t expect the ARM deal to directly impact the IoT activities of Sprint or Softbank’s Japanese telecoms operations.

For more information or to arrange an interview with Tom Rebbeck, please contact Eva Sulirova via press@analysysmason.com or telephone number +44 20 7395 9000.

You can also learn more about Analysys Mason’s IoT and digital services research via http://www.analysysmason.com/Trending-Topics/Positioning-for-the-Internet-of-Things-IoT/.

About Analysys Mason (www.analysysmason.com)
Analysys Mason has been a global specialist adviser in TMT for more than 30 years. Since 1985, Analysys Mason has played an influential role in key industry milestones and helping clients through major shifts in the market. We continue to be at the forefront of developments in the digital economy and are advising clients on new business strategies to address disruptive technologies.

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