SoftBank swoop for ARM Holdings 'shows UK is open for business'
SoftBank's £24 billion tie-up with Cambridge-based ARM Holdings shows "Britain is open for business", Theresa May said.
The swoop by the Japanese firm for one of the UK's biggest technology companies, which comes less than a month after the Brexit vote, proves the country remains as attractive ever to overseas investors, the Prime Minister said.
Mrs May gave her support to the deal after a conversation with SoftBank's chief executive Masayoshi Son on Sunday, where she learned of the Japanese firm's intent to double ARM's UK workforce and keep its headquarters in Cambridge.
Speaking in the Commons for the first time since becoming PM, Mrs May said: "I have spoken to SoftBank directly.
"They have confirmed their commitment to keep the company in Cambridge and to invest further to double the number of UK jobs over five years.
"This £24 billion investment will be the largest ever Asian investment in the UK.
"It is a clear demonstration that Britain is open for business, as attractive to international investment as ever."
Mrs May's comments come just a week after she pledged to devise a "proper industrial strategy" to defend UK companies from being snapped up by foreign businesses, including firms in Britain's pharmaceutical sector.
The co-founder of ARM Holdings said the deal marked a "sad day" for the British technology sector.
Hermann Hauser, who is now a partner at Amadeus Capital, tweeted that ARM Holdings' remarkable growth was the "proudest achievement of his life".
"The proposed sale to SoftBank is a sad day for me and for technology in Britain," he added.
SoftBank plans to embark on a major recruitment drive and hold on to ARM's existing management team following its takeover of the firm, which supplies technology for Apple's iPhone.
The deal marks the biggest ever Asian investment in the UK and values the technology firm at 1700p per share, a 43% premium on Friday's closing share price of 1189p.
The combined group hopes the acquisition will allow it to capitalise on opportunities in the "internet of things" - giving everyday objects a connection to the internet.
Shares in ARM Holdings jumped 42% following the announcement.
Stuart Chambers, chairman of ARM, said: "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."
As part of the deal, ARM Holdings will keep its headquarters in Cambridge, while efforts will be made to grow ARM's workforce outside of the UK.
The firm, which employs 3,000 people in the UK, saw its results come in ahead of expectations in April as pre-tax profits lifted 14% to £137.5 million in the first quarter year-on-year, while revenues also stepped up 22% to £276.4 million over the period.
Chancellor Philip Hammond said the takeover would "turn this great British company into a global phenomenon".
He added: "Just three weeks after the referendum decision, it shows that Britain has lost none of its allure to international investors. Britain is open for business - and open to foreign investment."
ARM's directors will recommend the deal is accepted by ARM shareholders at its forthcoming general meeting. The deal will also need to win the backing of regulators.
Mr Son, chairman and chief executive of SoftBank, said the investment marked its strong commitment to the UK and the "competitive advantage" of the science and technology industries in Cambridge.
However, Mark Skilton, a professor of practice at Warwick Business School, warned that it could lead to a loss of skills and knowledge from the UK.
He added: "The concern of brain drain and ARM business moving from the UK must be considered in this equation based on its know-how and leadership in chip design."
Neil Wilson, markets analyst at ETX Capital, said: "The pound is down around 10% since the referendum and this makes British firms a lot more attractive.
He added: "Poundland was recently snapped up by Steinhoff and if this ARM deal is anything to go by, we can expect a torrent of deals to flow."