Brexit, Techxit?

July 21, 2016 // By Peter Clarke
Wolfson Microelectronics gone to Cirrus; CSR gone to Qualcomm; Imagination stumbles; UK votes to leave the European Union; ARM votes to become a subsidiary of a Japanese telecommunications company with IoT dreams of grandeur. Is there a steady-state theory of tech company creation and destruction or are we living in a big-bang technology world? And was the bang we just heard the door closing as UK exits hardware technology?

The rise and rise of processor intellectual property licensor ARM, first under Robin Saxby, now Sir Robin Saxby, and then under Warren East, has been an essential part of the backdrop to my journalistic career. And I was looking forward to more of the same independent UK success under Simon Segars.

But money talks. And Masayoshi Son's exuberant enthusiasm for the Internet of Things and the fact that his company SoftBank has amassed a war chest of many billions of dollars has allowed him to swoop to buy ARM (see ARM agrees to be bought by Japan's Softbank). And ARM's board has a legal and fiduciary responsibility to act in the best interest of the shareholders and no responsibility to act in the national or continental interest.

Of course, arguments can be made about how these interests coincide and diverge in the near- and long-term.

So it would have been interesting to have been a fly on the wall in the board meeting that discussed the SoftBank proposal and to have noted who voted which way. Was it unanimous? One might assume chairman Stuart Chambers would have voted in favor, if his vote was required (see ARM's chairman was appointed to UK takeover committee). Chambers was also photographed with Son in Downing Street  as Son met the newly-appointed Chancellor of the Exchequer Philip Hammond, who promptly declared that the sale of ARM to Softbank to be a good thing, probably, and showed that UK was open for business in the post-Brexit era.

It is notable that Hermann Hauser, the entrepreneur who founded Acorn Computers in Cambridge, which was the original parent of ARM, said he was "very sad" at news of the £24 billion (about $32 billion) takeover. I too am sad and fearful that, despite the premium offered by SoftBank, ARM has undervalued its independence.