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Japan’s Softbank to buy UK semiconductor giant ARM for $32 billion

Japan's Softbank has agreed to acquire ARM Holdings, the U.K. semiconductor firm that supplies the chips used in iPhones, in a deal worth over $32 billion, the companies announced on Monday.

As part of its bid to bolster its presence in the growing internet of things (IoT) sector, Softbank will pay £17 per share for ARM, a 43 percent premium on Friday's closing price, in an all-cash deal. ARM shares rallied over 46 percent in early trade on Monday.

"ARM will be an excellent strategic fit within the SoftBank group as we invest to capture the very significant opportunities provided by the 'Internet of Things'," Masayoshi Son, chairman and chief executive of SoftBank, said in a statement.

ARM is a supplier to the companies including Apple and has been focusing heavily on improving its IoT semiconductor portfolio. IoT devices can be anything from an internet-connected washing machine to "smart" buildings. Some of these devices do not require the high-powered chips used in smartphones but often smaller and "low-powered" semiconductors which ARM has developed.

IoT connected devices will number 38.5 billion in 2020, up from 13.4 billion in 2015, a rise of over 285 percent, according to Juniper Research, highlighting the interest in this sector from major technology giants.

Softbank's acquisition of ARM...