Engineer readers are pessimistic about the implications of the sale of UK chip designer ARM Holdings to Japan’s Softbank.
This poll elicited the most clear-cut conclusion for several weeks. Of the 509 respondents, a clear majority, 59 per cent, thought the acquisition of ARM represented a loss of sovereignty over chip design. Fifteen per cent thought it an opportunist merger (perhaps because of the post-referendum weakness of Sterling); while 14 per cent thought it showed the UK was ‘open for business’ despite opting for Brexit. The smallest group, 12 per cent, declined to pick an option.
Please continue to send us your opinions on this topic.
Is “open for business” the new “taking back control”?
Can anyone imagine Intel being sold to a non US buyer?
Seems a shame that there isn’t a scheme such as there is for items of art or cultural significance whereby the bid is placed and then a UK organisation/consortium has the chance to match the bid before the sales go through.
There is a scheme in a way. The sale was subject to the personal approval of the Prime Minister – so could have been stopped.
“A spokeswoman for the prime minister said Mrs May believed the deal was in the country’s national interest – a gauge that she will use to assess any future foreign takeovers. ” http://www.bbc.co.uk/news/business-36822806
I voted “none of the above”, but I feel “all of the above” would have been the best match.
I feel exactly the same.
We want to be open for business not selling off all the silver………again
IP ownership is the name of the game now –
The silver has all been sold so now they are starting on the gold.
If you accept public listed companies are a free & fair market and the present owners have no long term goal beyond selling for the highest price the sale is a good deal for those involved.
However if the sale is taken in the context of the UK’s high technology development & growth for this sector it can only be a bad deal as inevitably decisions on where this key player will be in 5 or 10 years’ time will be taken in Japan and will not have the UK interests in mind.
The whole environment surrounding this sale and what UK PLC is going to be producing in 10 years depends on the environment for innovation in the UK and companies willingness to invest in this but it’s important to note Japanese companies tend to take a much longer view of these things.
In the casino society created by the grocer’s daughter, if it isn’t nailed down it will be flogged-off: and even if it is, some sham professional keen to make a buck will find the pliers to remove the nail.
I look forward to the up-coming sail? of the two white-elephants there to project our interests abroad, the planes which will probably not be able to land thereon and the four £30 billion secret launching pads of the £20 billion missiles….come on you get the idea! Surely our ‘intellectual property – the product(s) of the extremely fertile brains and imaginations of our technologists is what we need to defend, not flog it off to our competitors!
Why does it need to be sold ?????
This sale highlights the British habit of taking short term profit over long term growth, it is the main reason why Japan is where we should be – they have low interest ,long term investment available.
Also sale coincides with recent microsoft statement that future versions will support A.R.M.
Can anyone imagine Rolls Royce being sold to a foreign buyer? Anyway, after Brexit it is easier to take money with you should you need to leave. The sellers want to be flexible.
Rolls Royce Motors is, of course, German-owned.
However Rolls Royce Holdings are a UK company, As I recall they own the German Engine company MTU Fredrichshaven, Maybach as was
Although claimed to be a “cash purchase”, Softbank is to be sitting on huge debts, so not the “secure, safe parent company” at all. Although this would be a good deal for existing share holders it would only be a good deal looking at the short term.
ARM will continue with this business under the Japanese leadership, but the architects of the original business have built a dinghy that grew into a supertanker, and need to let the supertanker steam on: with the money the founders will all receive from their shares, at least 50% of them will continue creating the next generation dinghy designs, and find the next ARM with skis maybe. They are the ones that need to be nurtured to create the next generation device, unencumbered with having to jump to the Apple requests for faster/cheaper/smaller versions of the original. It’s the ideal way to grow new technology start-ups, that makes real opportunities.
Not so much evidence of open for business after Bexit – more like a fire sale!
Just overseas customers sensibly buying UK assets at discounted process due to the low pound then shift it overseas.
Wonder if this would have gone ahead if Sterling hadn’t gone through the floor? Great time for overseas companies to buy up and then ship it out helping to make Britian an irrelevance in the modern world.
There is an interesting blog on the ARM takeover by David Manners of Electronics Weekly fame.
Follow the link below.
http://www.electronicsweekly.com/blogs/mannerisms/delusions/is-softbank-crazy-2016-07/
This is an opportunist *take-over* (not merger) in the dog eat dog pseudo-world of business finance
Most of our engineering and manufacturing is foreign owned. It has not prevented growth and success and employment. The car industry is a case in point. I can so no correlation between ownership and national benefit either way.
A Board of Directors serves its shareholders, not its country. If the company continues to grow and succeed, what does it matter who owns it?
It matters who owns it because if it’s a foreign owner – as in this case – from now onwards profits flow out of the country and that has a negative effect on our balance of payments.
There’s also the concern that the top-level design functions at least will drift to the country of ownership.
I’m uncomfortable with foreign ownership of high tech businesses. In good times in Japan investment in the Company might be forthcoming, but if times are hard, will support dry up, and the technology find its way into home grown Japanese companies?
There is a world of difference between a factory full of equipment making cars to an IP company saving their ideas to disc. The man in Japan downloads his new property from Cambridge and can then sell it on, and please make the cheque to our Japanese account. Simple.
I am surprised Hermann Hauser is so upset about ARM being bought by a foreign company. If you list a company on the stock market that is always a possibility.
He should have kept it as a private company – no money draining out to shareholders, and no chance of the company being bought by someone he would rather not sell it to.
A Board of Directors serves its shareholders: lovely idea? but given a choice, it will be their personal interests which dominate. I was interested in reading about other’s views on financial persons. In 2004-ish I was the lead technical/marketing guru for the purchase by Koch Inc of Kansas of the majority of Du Pont’s [Kevlar, Lycra, Dacron, Orlon, Antron] synthetic fiber! interests. One of the banks involved was Lehman Bros. As a technologist and Engineer I found great pleasure in being a part of defining the future of a major player in an industry I knew well, had had a wonderful career in, and loved. Those “*ankers” from Lehman clearly had a single interest. “How much will be my bonus for dealing with this sale?” Look what happened to them?
The Board has no option under the Stock Exchange Rules, HOWEVER, the purchaser has 100Bn DEBT to service, what chance its long term survival?? Zilch
Just 6 weeks of current account deficit paid for.
With the crash of the pound since the vote, and worse still to come if most city experts are to be believed, the “price” of British companies to overseas investors has plummeted and this will be the first of many.
“….if most city experts are to be believed,”
Why this time? They get it so wrong so often…
Mike Patching asks about an equivalent scheme for ‘industrial purchases’ as applies to ‘artistic/cultural’ matters bid for from abroad. Great idea: but who amongst the present G&G has any idea what is ‘industrially significant!’? Unless and until these ‘arty’ shams -those who studied Greeks and Romans, et al are eclipsed look forward to being a part of a third world country. Mind you, we will be the best defended bankrupt in the world. And we do have ‘service’ industries (whatever those are) that operate the grocer’s daughter inspired casino.