ARM shareholders overwhelmingly vote in favour of sell-out to Softbank

Running all the way to the Softbank

The shareholders of British semiconductor designer ARM have voted overwhelmingly in favour of its £24.3bn acquisition by Japanese conglomerate Softbank, announced last month.

Shareholders voted 95.12 per cent in favour against just 4.88 per cent against. Barring any sudden and unexpected events, ARM will become a part of Softbank next week, on Monday, 5 September.

The news was met with a mixed response. TechMarketView's Richard Holway - who sold out his own advisory firm, Holway Associates, to analyst group Ovum many years ago - is very much against the acquisition of the UK's largest and most high-profile technology company.

"Whatever 'promises' made, they will now be a subsidiary of a highly indebted foreign company. Although a base might well be maintained in Cambridge, all the corporate decisions will be made abroad," warned Holway.

"The UK will lose out in many ways, from the loss of taxes from a foreign-owned firm balancing its underlying profitability against high debts, to the various service companies that benefit from a successful local company.

"Ever since I started my analysis company in 1986, the takeovers have practically all been one way. So I have to say that every quoted (and private) UK tech company is vulnerable. All the way from Imagination Technologies to Sage to MicroFocus to Aveva, with everyone in between. The devaluation of the pound makes UK companies even more attractive [and] US tax rules, making it difficult to repatriate overseas profits, also encourages US companies to acquire in the UK," Holway continued.

Ipso facto, he added, the fact that the UK is a relatively easy place to get an "exit" from an investment should also make it a relatively attractive place to start up and grow a company. "Maybe that is our destiny - as an incubator of tech companies and serial entrepreneurs? There are probably worse fates!"

Holway is not alone in lamenting the acquisition of ARM by Softbank. "Despite Softbank's commitment to double the number of UK jobs, history shows us that innovation and manufacturing jobs tend to drift away over the five to 10 years following a foreign acquisition," said Gordon Sanghera, CEO of Oxford Nanopore Technologies.

He added that the company would lose its autonomy and become less agile and effective - the acquisition will also need to pay for itself, one way or another. "Research, development and production in novel technologies are part of a delicate and symbiotic ecosystem that is most effective when people are located near to each other," Sanghera said.