20 July 2016
Can you turn a British company into a global phenomenon without selling it?
I am saddened to hear that Theresa May doesn’t seem to think so, as demonstrated by her approval of the acquisition of chip designer ARM Holdings by Japanese tech company Softbank.
Whilst I am 100% behind growing businesses and the economy, at a time when Britain’s position in the world is still to be decided post-Brexit, I am sad to see ARM – the company behind the design of the processor chips that are used in almost every smart phone today – sold to an international investor.
According to May, who has made a U-turn on her earlier views that foreign acquisitions are a concern, the deal “is in the country’s best interest” and “could turn this Great British company into a global phenomenon”.
In an announcement earlier this week, she used the sale of ARM Holdings as a case study for how successful Britain can be after leaving the EU.
In my opinion, the sale of the tech company has nothing to do with Brexit. Why would we not be able to turn a successful company into a ‘global phenomenon’ under British ownership? Why are we unable to grow and nurture large tech companies like this in Britain? Why do we allow for successful businesses to be snapped up by foreign investors before they reach their prime?
This deal might look like a good thing for Britain, but – like many others in the tech sector – I think that selling off Britain’s industrial assets is something we should be concerned about. Of course, not all foreign ownership is bad, but when it comes to a business of this size that has formed part of Britain’s tech history, I can’t help but feel a huge sense of loss.
The technology sector is incredibly important to the UK and the sale of one of its biggest players is likely to have serious consequences. The sale of ARM leaves only one tech company in the FTSE100. One!
On a personal level, this could become incredibly demoralising but I now see it as a challenge for us, the smaller tech businesses, to make an impact and grow to that level. To show just what can be achieved in Britain. We work so hard to make Britain one of the main players in the world of tech, but deals like this have the potential to make the British tech sector become less relevant every day – unless we make a stand and push our way into the limelight.
Britain has an extraordinary wealth of technological talent that we need to show off.
Hermann Hauser is one of ARM’s original founders. In the press, he called the deal “a sad day for technology”, adding that the “determination of what comes next for technology will not be decided in Britain any more, but in Japan”.
On the one hand, the company will keep its headquarters in Britain and is expected to more than double the number of employees over the next five years. This is, of course, great news for the economy in the short term – as long as the firm pays its taxes fairly. But, on the other hand, it is very unlikely that a foreign acquisition benefits the people living and working in this country in the long term. Promises of a UK headquarters are only temporary, there are no guarantees. If a business is doing well, why would we risk a change of ownership, strategy or culture? Why would we risk this company losing major clients because of it? Why would we give up on independence and security?
I believe that businesses don’t simply succeed because of an injection of foreign investment. I think they are successful because they are run by committed business people, who work hard and feel passionate about the business and the industry it is aiming to change.
What do you think – is the sale of ARM Holdings a good or a bad thing?