SoftBank to buy ARM for £24B, plus 3 deals that didn’t survive Brexit

July 18, 2016

SoftBank has announced that it plans to acquire ARM for just over £24 billion in what the Financial Times has called "the largest acquisition of a European technology business." The UK-based ARM licenses microprocessor designs to chipmakers for use in mobile devices and is angling to establish itself as the go-to designer for the IoT market. In 2015, it shipped around 7 billion ARM-based chips into mobile devices, including smartphones and tablets. An increasing number ship into networking infrastructure and embedded intelligent devices such as microcontrollers and chips for the IoT. But the deal represents more than just a play for the future of IoT chipmaking. With the British pound down 30% against the Japanese yen for the year, SoftBank’s acquisition of ARM also signals further fallout from Brexit.

ARM’s founder, Hermann Hauser, has said the deal represents “a sad day for me and for technology in Britain.” But handing over the keys to the UK’s flagship tech company has not produced the same sentiment from everyone briefed on the pending transaction. “Just three weeks after the referendum decision, it shows that Britain has lost none of its allure to international investors,” the UK’s new chancellor of the exchequer, Philip Hammond, has said of the deal. But Masayoshi Son, SoftBank’s colorful CEO, stressed in a press conference following his conversation with Hammond and the UK’s new Prime Minister, Theresa May, that “I did not make the investment because of Brexit. The paradigm shift [to IoT] is the opportunity.”

All the same, SoftBank’s move, like AMC’s “opportunistic” Odeon & UCI pick-up last week, illustrates that the cratering pound has already created some unexpected chances amid the wider uncertainty created by Brexit. But not everyone has been able to close.

Here are three recently canceled deals from industries to watch as market uncertainty continues to unfold after Brexit:

Tata Steel's Port Talbot Steelworks

The company manufactures steel through its production facility in Port Talbot, Wales, which includes blast furnaces and steel production plant buildings. It had been in talks to be acquired by its management for an undisclosed amount on April 20. However, the Indian steelmaker canceled the deal on July 8 over uncertainties created by Brexit, according to The Times. The company was acquired by Tata Steel Europe in 1967.

Grieg Seafoods' Shetland Business

The company operates fish farms in the Shetland Islands, Scotland. Norway’s Grieg Seafoods was in talks to sell this portion of its Scottish business to Dawnfresh Seafood on May 23. However, the deal was canceled on July 5 with the company’s local manager Sigurd Pettersen reported as saying the weaker pound wouldn’t help the deal, as most of the company’s sales take place in the UK.

Highlands Natural Resources' Helios Two

The company, a subsidiary of Highlands Natural Resources (LON: HNR), had entered into a definitive agreement on June 15 to be acquired by Opera Investments (LON: OPRA) for £4 million. However, the deal was canceled July 11. Highlands’ Helios Two natural gas and helium project in Montana will still be developed by the company in an attempt to prove the concept.

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