In a deal worth more than $32 billion, ARM Holdings the giant U.K. semiconductor firm that supplies part of the chip design used in Apple iPhones, will be bought over by Japan’s Softbank.

This was announced by the two firms on Monday.

With its processor and graphics technology used by Samsung, Huawei, and Apple in their in-house microchips, ARM is the largest London-listed tech company by market value and is a major presence in mobile processing.

The vast majority of the world’s smartphones have components that are based on technology licensed by ARM even as the Cambridge-based group ventures in to other connected devices as smartphone growth slows.

In an all-cash deal. ARM shares rallied over 46 percent in early trade on Monday, Softbank will pay £17 per share (about $22.50 a share) for ARM, a 43 percent premium on Friday’s closing price as part of its bid to bolster its presence in the growing internet of things (IoT) sector.

“This is a company I always admired for the last 10 years. This is the company I wanted to make part of Softbank. I am so happy,” Masayoshi Son, chairman and chief executive of SoftBank, told reporters in London Monday.

Since Softbank “does not operate any competitive business against ARM. This will be very straightforward”, the deal will close quickly, said the CEO while talking about whether the deal will face opposition.

Improvement of its IoT semiconductor portfolio has been the major focus of ARM. Ranging from an internet-connected washing machine to “smart” buildings, IoT devices can include anything. Often smaller and “low-powered” semiconductors which ARM has developed are required by some of these devices instead of the high-powered chips used in smartphones.

The interest in this sector from major technology giants is highlighted in a recent report by Juniper Research which claims that IoT connected devices will number 38.5 billion in 2020, up from 13.4 billion in 2015. The IoT as a “paradigm shift”, Masayoshi Son described.

ARM’s semiconductors will be used in the increasingly connected car and not just for wearables or smart home appliances. The automotive industry could be a big growth driver for chipmakers, ARM Chief Executive Simon Segars had said earlier this year and this sentiment was echoed by Masayoshi Son.

“I would say automobile is becoming smarter and smarter so when automobile becomes so smart it is required to have more and more chips integrated inside the car, especially when it becomes a driverless car. Automotive itself will become a super computer which consists of a bunch of multiple chips so ARM will be going into that market very aggressively,” Masayoshi Son said.

One of the biggest takeovers of a European technology business is represented by Softbank’s acquisition of ARM. With an employee strength of 4,000 people, ARM is based in Cambridge, U.K.

It was believed that Brexit would have an impact on investment in U.K. technology but the deal seems to have proved that assumption wrong. One of the reasons is the global customer base of ARM which would protect it from any Brexit fallout.

The existing senior management team, brand and culture would be preserved by Softbank, it said. While Softbank pledged to double the employee headcount in the U.K. over the next five years, ARM’s headquarters will remain in Cambridge. The deal is subject to ARM shareholder approval.

(Adapted from CNBC)

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