Posted on July 27, 2016 by staff

SoftBank ARM takeover “has broad ramifications for UK R&D”


A leading R&D lobby group has warned that the £24billion Japanese takeover of ARM could have “broad ramifications” for science and technology research in the UK.

The Cambridge-based tech giant, which designs the microchips used in the vast majority of smartphones, will be bought by SoftBank in a mega deal.

The telecoms company’s founder and CEO Masayoshi Son believes the mega deal is justified huge rise in Internet of Things devices, which require chips to communicate.

He sees ARM Holdings, which has reported a 17 per cent surge in sales since the takeover was announced a week ago, as integral to SoftBank’s intention to occupy the IoT marketplace.

However the Research & Development Society did not mince its words in its view of the deal, warning that such foreign takeovers rarely benefit the UK.

“The acquisition of ARM Holdings by SoftBank has very broad ramifications for UK research and development,” said its chief executive Nico Macdonald.

“This development will do nothing to support UK growth strategy, particularly for medium-sized companies, and will further weaken the commercialisation environment around science and technology.

“This acquisition may also encourage more medium-sized companies to consider selling up.”

It compared the takeover to American firm Kraft’s hostile £11.5bn takeover of Cadbury in 2010.

Kraft has come under fire over its failure to protect British jobs – despite promising to do so – and for changing the recipes of several traditional products.

SoftBank has promised to keep ARM’s headquarters in Cambridge while it also pledged to double staff numbers, which currently stand at 1,600.

Meanwhile someone who claims to be a senior software engineer at ARM has also voiced concerns at the impending sale.

“We’ve listened to the justifications put forth, and they did not inspire,” they wrote on website Glassdoor, where staff can anonymously review workplaces.

“Let’s be honest here. It may take five years, or ten years, but eventually things are going to diverge, tough times will appear, promises aren’t going to be remembered, and lots of loyal staff are going to be left out in the cold.

“We valued ARM’s independence and were proud to work for a British company.

“Now it feels as if we’re doomed to be another appendage to an out-of-country operation.”

There are also concerns in the tech sector that Brexit will impact funding for research, leading to calls for the Government to formulate an immediate plan for protecting the digital economy.