Mourning the loss of ARM Holdings

There was something almost inevitable about the takeover this weekend of chip designer ARM Holdings. It's by far our largest technology company and has regularly been subject of bid speculation. The only surprise perhaps is that it's the Japanese that are buying rather than the Americans.

ARM has been, and will remain, a great ambassador for British business. Beginning life as Acorn back in the late-70s, then as part of a joint venture with Apple and VLSI Technology created ARM – Acorn (later Advanced) RISC Machine - it is the beating heart of the Cambridge technology cluster. Of course, there will be some who mourn its loss.

I have a soft spot for ARM, too, and remember vividly the Daily Mail's Michael Walters tipping the shares, first via Acorn on the Unlisted Securities Market then as ARM following the IPO in 1998. ARM was worth just £1.8 billion.

But this is no time for grieving. And don't blame management. Softbank's offer of 1,700p a share, worth over £24 billion, is a knockout bid and impossible for a board responsible for shareholder interests to turn down. It's a 43% premium to Friday's closing price and 38% above last April's previous best of 1,233p. Keep the shares until autumn and there's an interim dividend worth 3.78p a share, too.

ARM shares have outperformed the wider market since the EU referendum, but had been mediocre performers in the previous 18 months. In fact, trading has been volatile between 800p and 1,200p for the past 3½ years.

Late last year, fears were raised that deal-making in the chip sector would mean fewer customers, leading to fewer licences and potential royalties. Big electronics players might also be tempted to do more of the design work themselves, buying in cheaper ARM architecture instead.

Clearly, Softbank, which paid $22 billion for US carrier Sprint in 2013, likes what it sees, and although we're told that Brexit played no part in the decision-making process, with the pound down around 29% versus the Japanese yen since last August, this deal is too good to miss.

ARM will be a major player in the field of low power processing, crucial to the Internet of Things. SoftBank chairman and chief executive Masayoshi Son understands that and the "very significant" opportunities it brings.

And there's plenty to reassure us that ARM is in safe hands. Both the new PM Theresa May and chancellor Philip Hammond have been briefed about the deal, and there is unlikely to be any objection from the Competition authorities.

If it had been an American firm buying up the business – Intel was rumoured to be mulling an offer - I'd have been worried. Kraft's hostile takeover of Cadbury in 2011 left a very bitter taste; the Americans reneging on a promise not to shut the key factory at Somerdale, near Bristol. The $10 billion acquisition of Autonomy by Hewlett-Packard, meanwhile, has been nothing short of disastrous.

But offices at ARM will not close and staff will keep their jobs. In fact, SoftBank has "provided assurances" to at least double the number of staff in the UK over the next five years. Crucially, ARM's top brass stay, too.

This positivity certainly chimes with what I hear from former colleagues at the Financial Times, bought by Nikkei last summer for £844 million. Charles Philipps, who runs insurer Amlin, also had no qualms about selling up to Mitsui Sumitomo for £3.5 billion.

There'll also be plenty of cash to throw at "multiple" growth initiatives and for investment in engineering talent. And expect more acquisitions to keep ARM ahead of the pack.

"SoftBank intends to invest in ARM, support its management team, accelerate its strategy and allow it to fully realise its potential beyond what is possible as a publicly listed company," said Son. "It is also intended that ARM will remain an independent business within SoftBank, and continue to be headquartered in Cambridge."

"This is one of the most important acquisitions we have ever made, and I expect ARM to be a key pillar of SoftBank's growth strategy going forward."

That's reassuring stuff and, with the same technology-oriented culture, the pair should thrive together. Admittedly, SoftBank is making a meal of turning Sprint around, and its debt pile is certainly hefty. But it has just sold almost $10 billion worth of Alibaba shares, bought for peanuts in 2000, and the remaining stake is currently worth about $56 billion.

There is inevitably a tinge of sadness at the loss of independence to new masters in Tokyo, but ARM's future in the UK is, at least, secure and £17 will likely be compensation enough for shareholders to back the sale of this British icon.

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