• THE TRANSACTION ENABLES THE COMBINED GROUP TO FULLY CAPTURE THE “INTERNET OF THINGS” OPPORTUNITY

TOKYO — (BUSINESS WIRE) — July 17, 2016 — 18 July 2016

Summary

• The boards of directors of SoftBank Group Corp. (“ SoftBank”) and ARM Holdings plc (“ ARM”) are pleased to announce that they have reached agreement on the terms of a recommended all cash acquisition of the entire issued and to be issued share capital of ARM by SoftBank (or, at SoftBank’s election, a wholly-owned subsidiary of SoftBank).
• Under the terms of the Acquisition, each ARM Shareholder will be entitled to receive:

for each ARM Share: 1,700 pence in cash

• The price of 1,700 pence per ARM Share represents a premium of:
  • approximately 43.0 per cent. to the closing price of 1,189 pence per ARM Share, and approximately 42.9 per cent. to the closing price per ARM ADR of USD 47.08,on 15 July 2016 (being the last Business Day prior to this Announcement);
  • approximately 69.3 per cent. to the volume weighted average closing price of approximately 1,004 pence per ARM Share, and approximately 58.7 per cent. to the volume weighted average closing price per ARM ADR of USD 42.39, over the three months prior to and including 15 July 2016 (being the last Business Day prior to this Announcement); and
  • approximately 41.1 per cent. to the all-time high closing price of 1,205 pence per ARM Shareon 16 March 2015.

• The consideration values the entire existing issued and to be issued share capital of ARM at approximately £24.3 billion.
• In addition, ARM Shareholders who are on the register of members of ARM as at close of business on 8 September 2016, or at close of business on the Business Day prior to the Effective Date if earlier, will be entitled to receive and retain an interim dividend of 3.78 pence per ARM Share, which dividend will be paid on 10 October 2016 or, if earlier, the Effective Date (the “ Dividend”), without any reduction of the offer consideration payable under the Acquisition. In addition, ARM Shareholders will also be entitled to receive and retain any future dividends in the ordinary course with a record date prior to the Effective Date (“ Ordinary Course Dividends”), without any reduction of the offer consideration payable under the Acquisition. In particular, those ARM Shareholders who are on the register of members of ARM as at close of business on 20 April 2017 (being the record date for the 2016 final dividend) will be entitled to receive and retain the 2016 final dividend for the period to 31 December 2016 of up to 6.76 pence per ARM Share that is expected to be paid on 11 May 2017. If the Effective Date occurs before the record date of any Ordinary Course Dividend, ARM Shareholders will not be entitled to receive such dividend.
• If, after the date of this Announcement, any dividend and/or other distribution and/or other return of capital (other than the Dividend and any Ordinary Course Dividends) is announced, declared or paid in respect of the ARM Shares, SoftBank reserves the right to reduce the offer consideration by an amount up to the amount of such dividend and/or distribution and/or return of capital so announced, declared or paid.
• SoftBank intends to:
  • preserve the ARM organisation, including ARM’s existing senior management team, brand, partnership-based business model and culture to ensure continuity of a strong track record;
  • maintain the headquarters of ARM in Cambridge;
  • at least double the employee headcount in the UK over the next five years thereby enabling ARM to continue to develop leading-edge technology in the UK; and
  • increase the headcount of ARM outside the UK over the next five years.

• It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.
• The Board of ARM, which has been so advised by Goldman Sachs International and Lazard & Co., Limited as to the financial terms of the Acquisition, considers the terms of the Acquisition to be fair and reasonable. In providing their advice to the Board of ARM, Goldman Sachs International and Lazard & Co., Limited have taken into account the commercial assessments of the Board of ARM.
• Accordingly, the ARM Directors confirm that they intend unanimously to recommend that ARM Shareholders vote to approve the Scheme at the Court Meeting and vote in favour of the resolutions to be proposed at the General Meeting, as those of them who hold ARM Shares have irrevocably undertaken to do in respect of their own ARM Shares. Such ARM Directors have also each undertaken that, if the Acquisition is implemented by means of a Takeover Offer instead of by way of the Scheme, they shall accept such Takeover Offer in respect of their ARM Shares.
• The cash consideration payable under the Acquisition will be funded by SoftBank’s existing cash resources and cash drawn down from a term loan facility between SoftBank and Mizuho Bank, Ltd.
• The terms of the Acquisition will be put to ARM Shareholders at the Court Meeting and the General Meeting (which is expected to immediately follow the Court Meeting). The Court Meeting and the General Meeting are required to enable ARM Shareholders to consider, and if thought fit, vote in favour of the resolutions to approve the Scheme and its implementation. In order to become Effective, the Scheme must be approved by a majority in number of Scheme Shareholders, present and voting, whether in person or by proxy, representing 75 per cent. or more in nominal value of the Scheme Shares held by those Scheme Shareholders.
• The Acquisition is not subject to any anti-trust or regulatory conditions. The Acquisition is subject to a number of other conditions which are set out in Appendix 1 to this Announcement, certain other terms as are set out in this Announcement and to the full terms and conditions to be set out in the Scheme Document.
• Commenting on today’s Announcement, Masayoshi Son, Chairman and CEO of SoftBank said:
  
  “We have long admired ARM as a world renowned and highly respected technology company that is by some distance the market-leader in its field. 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”.
  
  “This investment also marks our strong commitment to the UK and the competitive advantage provided by the deep pool of science and technology talent in Cambridge. As an integral part of the transaction, we intend to at least double the number of employees employed by ARM in the UK over the next five years.
  
  “SoftBank intends to invest in ARM, support its management team, accelerate its strategy and allow it to fully realise its potential beyond what is possible as a publicly listed company. It is also intended that ARM will remain an independent business within SoftBank, and continue to be headquartered in Cambridge, UK.
  
  “This is one of the most important acquisitions we have ever made, and I expect ARM to be a key pillar of SoftBank’s growth strategy going forward.”

• Commenting on today’s Announcement, Stuart Chambers, Chairman of ARM said:
  
  “It is the view of the Board that this is a compelling offer for ARM Shareholders, which secures the delivery of future value today and in cash. The Board of ARM is reassured that ARM will remain a very significant UK business and will continue to play a key role in the development of new technology. SoftBank has given assurances that it will invest considerably in the business, including doubling the UK headcount over the next five years and maintaining ARM's unique culture and business model. ARM is an outstanding company with an exceptional track record of growth. The Board believes that by accessing all the resources that SoftBank has to offer, ARM will be able to further accelerate the use of ARM-based technology wherever computing happens.”

• The Raine Group, Robey Warshaw LLP and Mizuho Securities Co., Ltd. are acting as financial advisers to SoftBank. Goldman Sachs International and Lazard & Co., Limited are acting as lead financial advisers to ARM. UBS is acting as financial adviser and joint corporate broker to ARM and Barclays is acting as joint corporate broker to ARM.
• It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and General Meeting, together with Forms of Proxy, will be posted to ARM Shareholders and (for information only) to participants of the ARM Share Schemes as soon as practicable. Subject to the satisfaction or waiver of all relevant conditions, including the Conditions, and certain further terms set out in Appendix 1 to this Announcement and to be set out in the Scheme Document, it is expected that the Scheme will become Effective as soon as practicable in Q3 2016. An expected timetable of principal events will be included in the Scheme Document.
• This summary should be read in conjunction with and is subject to the full text of this Announcement (including its Appendices). The Acquisition will be subject to the Conditions and the further terms set out in Appendix 1 and to the full terms and conditions to be set out in the Scheme Document. Appendix 2 contains the bases and sources of certain financial information contained in this Announcement. Appendix 3 contains details of the irrevocable undertakings received by SoftBank. Appendix 4 contains the definitions of certain terms used in this Announcement.