It’s easy to see why Arm Holdings, the UK’s only global-scale internet technology company, looked worth a quick £24 billion bet by Softbank of Japan. At $1.32 to the pound, the price is a lot cheaper than it could have been before polls closed on 23 June, when sterling stood at $1.50; that made it easy for Softbank to offer a fat premium over last Friday’s closing Arm share price — and harder for Arm’s board to say no.
As for Arm’s business, it’s unlikely to be knocked by Brexit since its microchips are priced in dollars and sold chiefly to smartphone makers in Asia and the US. And its prospects — in the development of the ‘internet of things’, from driverless cars to WiFi-powered kitchens — are huge. So I raise my sake cup to Masayoshi Son, the entrepreneur behind Softbank, who clearly believes he has snapped up a timely bargain.
But if it’s good for him, is it bad for us? Is there such a thing as a win-win in the international takeover arena, even when there’s a promise to keep Arm in Cambridge and add 1,500 jobs over the next five years? Optimists point to the success of Jaguar Land Rover under Indian ownership, but other episodes are less encouraging.
The 2011 sale to Hewlett-Packard of Autonomy — a software venture also based in Cambridge and specialised in ‘big data’ analysis — turned into a farrago of flying writs, as HP accused Autonomy of ‘misrepresentation’ while Autonomy founder’s Mike Lynch claimed HP mismanaged the business. A different example is Pilkington, the St Helens-based company that was once the world leader in glass technology: since it was bought by Nippon Sheet Glass in 2006, its name has rarely been heard again.
The truth is that new Chancellor Philip Hammond was being as opportunistic as Mr Son when he called Softbank’s Arm purchase ‘a big vote of confidence in British business’.