Seeing the Bigger Picture of SoftBank’s Potential Acquisition of ARM Holdings

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By Jake Saunders | 3Q 2016 | IN-4164


SoftBank Shares Drop 10%


A number of SoftBank’s investors took umbrage with its CEO, Masayoshi Son, when SoftBank announced it would acquire ARM Holdings, the UK firm behind the ARM application processor architectures. Semiconductor vendors such as Qualcomm, Samsung, Apple, etc., then use the ARM chipset architectures and/or the processor instruction set to mass produce APUs that power more than 95% of the world’s handset and smartphones. Despite ARM’s dominance in one of the world’s most important industries (ICT), SoftBank’s shares dropped 10% in trading on Tuesday, July 19, 2016. Why the bolt for the exits by investors?

Huge Pile of Debt


In a word: “debt.” SoftBank has been piling on the debt, as the company made a number of acquisitions. In 2006, SoftBank bought Vodafone’s Japanese operation for US$ 17 billion. In October 2012, the company purchased Japan’s eAccess (US$ 4.4 billion) to expand the company’s mobile subscriber footprint and spectrum. In the same mont…

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