ARM shares chipped away by Artisan deal
Shares in chip designer ARM Holdings fell 18% today as investors gave a lukewarm reaction to the acquisition of US technology firm Artisan.
ARM, whose designs are used in mobile phones and iPod digital music players, has agreed a deal worth $913m (€744.8m) to buy Artisan.
It hopes the deal will increase royalty payments from sales of microchips to semiconductor manufacturers. Artisan has licensed designs to more than 2,000 firms compared with ARM’s customer base of 130.
Investors appeared unimpressed with the deal as shares in the former blue-chip stock fell 17.75p to 82.75p amid fears that it had overpaid for the group.
Analysts at Barclays stockbrokers said the price paid by ARM to acquire Artisan was “even more surprising than the deal itself”.
Savings would be limited as both companies rely heavily on research and development, and the acquisition did not appear to add to its product portfolio significantly.
Cambridge-based ARM, which employs 763 full-time staff, said it planned to use Artisan’s sales channels to lift demand for its technology.
In addition to its bases in the US, Artisan has an engineering and support office in Bangalore, India, and sales offices in Tokyo, Paris and Singapore. It currently employs more than 325 people worldwide.
ARM chairman Robin Saxby said the acquisition represented an “excellent strategic fit”.
He said: “Artisan has a proven sales channel which will be highly complementary with the ARM sales channel.
“The combined entity will be able to reach more customers with a broader portfolio to better serve our combined user community.”
