Son speaks during a news conference in Tokyo. Source: AP

Japan’s SoftBank agrees to spend $32bn on UK’s microchip maker ARM Holdings

SOFTBANK Group Corp., a Japanese multinational telecommunications and Internet corporation, has agreed to buy U.K. tech firm ARM Holdings for US$32 billion (£24 billion), it confirmed on Monday.

The buyout, which ARM is expected to encourage shareholders to accept, has been likened to a bet that SoftBank is making in hopes that the smartphone microchip designer will make it a leader in the Internet of Things market, according to the Financial Times.

This will be the biggest acquisition of a European technology business, for which SoftBank will pay US$22.56 (£17) in cash for each share in the U.K. firm, a 43 percent premium on its closing market value of over US$22 billion (£16.8 billion) last Friday.

ARM said it will keep its headquarters in Cambridge, and is likely to double its number of staff in the next five years, reports BBC. The firm provides technology used in 95 percent of all smart phones, 80 percent of digital cameras, and 35 percent of all electronic devices.

Today’s announcement comes less than a month after SoftBank founder Masayoshi Son backtracked on his plans to step down from the company, and just a few weeks after Britain voted to exit the European Union, which pummeled the pound sterling and has bolstered the Japanese yen.

SEE ALSO: Pound plummets to 31-year low, Asian markets volatile as Britain votes for Brexit

BBC technology correspondent Rory Cellan-Jones commented that the takeover is a shock to many that ARM Holdings is “about to lose its independence”.

He wrote that although ARM will have a “good parent”, he lamented that the U.K.’s “best hope of building a global technology giant now appears to have gone”.

Masayoshi said in a statement: “This is one of the most important acquisitions we have ever made, and I expect ARM to be a key pillar of SoftBank’s growth strategy going forward.

“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.”

The U.K.’s new Chancellor of the Exchequer, Philip Hammond, defended the takeover, saying it was a sign that “Britain has lost none of its allure to international investors”, and reiterated that the U.K. is open for business.