On Monday, the boards of directors of SoftBank Group and ARM Holdings announced that they have reached agreement on the terms of a recommended all cash acquisition of the entire issued and to be issued share capital of ARM by SoftBank. The consideration values the entire existing issued and to be issued share capital of ARM at approximately £24.3 billion (about US$32 billion).
The cash consideration payable under the Acquisition will be funded by SoftBank’s existing cash resources and cash drawn down from a term loan facility between SoftBank and Mizuho Bank.
SoftBank intends to preserve the ARM organisation, including ARM’s existing senior management team, brand, partnership-based business model and culture to ensure continuity of a strong track record, while maintaining the headquarters of ARM in Cambridge. The Japanese vendor also intends to at least double the employee headcount in the UK over the next five years thereby enabling ARM to continue to develop innovative technology in the UK; and increase the headcount of ARM outside the UK over the next five years.
The terms of the acquisition will be put to ARM shareholders at the court meeting and the general meeting, which is expected to immediately follow the court meeting. The court meeting and the general meeting are required to enable ARM shareholders to consider, and if thought fit, vote in favour of the resolutions to approve the scheme and its implementation. In order to become effective, the scheme must be approved by a majority in number of scheme shareholders, present and voting, whether in person or by proxy, representing 75 per cent. or more in nominal value of the scheme shares held by those scheme shareholders.
The acquisition is not subject to any antitrust or regulatory conditions.
The board of ARM, which has been so advised by Goldman Sachs International and Lazard & Co., as to the financial terms of the acquisition, considers the terms of the acquisition to be fair and reasonable. In providing their advice to the board of ARM, Goldman Sachs International and Lazard & Co. have taken into account the commercial assessments of the board of ARM.
Accordingly, the ARM directors confirm that they intend unanimously to recommend that ARM shareholders vote to approve the scheme at the court meeting and vote in favour of the resolutions to be proposed at the general meeting, as those of them who hold ARM shares have irrevocably undertaken to do in respect of their own ARM shares.
Such ARM directors have also each undertaken that, if the acquisition is implemented by means of a takeover offer instead of by way of the scheme, they shall accept such takeover offer in respect of their ARM shares.
“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 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. “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. As an integral part of the transaction, we intend to at least double the number of employees employed by ARM in the UK over the next five years.”
“It is the view of the Board that this is a compelling offer for ARM Shareholders, which secures the delivery of future value today and in cash. The Board of ARM is reassured that ARM will remain a very significant UK business and will continue to play a key role in the development of new technology,” said Stuart Chambers, chairman of ARM. “SoftBank has given assurances that it will invest considerably in the business, including doubling the UK headcount over the next five years and maintaining ARM’s unique culture and business model. ARM is an outstanding company with an exceptional track record of growth. The Board believes that by accessing all the resources that SoftBank has to offer, ARM will be able to further accelerate the use of ARM-based technology wherever computing happens.”