Softbank's ARM takeover: iPhone chips will no longer be British

Japanese tech giant Softbank has agreed to take over ARM Holdings in a deal worth £24bn.

ARM Holdings is best known for making microchips to power smartphones, particularly Apple's iPhones.

As per reports, Softbank wants to use the expertise and reach of ARM Holdings to power future 'Internet of Things' devices, including smart washing machines, cars and TVs, which may flood our homes and workplaces in the future.

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Even though ARM Holdings overwhelmingly dominates the smartphone microchip industry, less than half of its microchips power smartphones, whether iOS or Android. Given that Softbank's primary business is in developing robotics and internet technologies, the merger will let the Japanese enterprise use ARM's chips to power probably all its devices and accessories in the future.

"Softbank’s decision confirms that Britain remains one of the most attractive destinations globally for investors to create jobs and wealth. And as ARM’s founders will testify, this is the greatest place in the world to start and grow a technology business,” said Stuart Chambers, the chairman of ARM Holdings.

Economically for Britain, even though is it the largest ever foreign takeover of a home-grown enterprise, Softbank's takeover will double ARM's existing workforce of 1,600 in the UK and ARM, whose top management will function as an independent business, will continue to function out of its headquarters at Cambridge.

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“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. This investment also marks our strong commitment to the UK and the competitive advantage provided by the deep pool of science and technology talent in Cambridge,” said Masayoshi Son, founder of Softbank.

As far as the deal's political fallout is concerned, Theresa May's Conservative government has been averse to foreign takeovers and given that the announcement of the takeover takes place days after she took her oath to the Prime Minister's office, her power to influence business decisions may be called in question. However, both Softbank and ARM Holdings have been discussing the deal long before her appointment or even Brexit happened, so blaming her for the deal wouldn't be fair.

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