The Japanese takeover of the UK's largest technology company, Arm Holdings, has been criticised by the company's founder as a "sad for Britain" – contradicting the warm welcome the prime minister and chancellor of the exchequer gave the proposed deal.
Arm, which designs the chips used by most of the world's smartphones, is being bought for £24.3 billion by Japanese mobile phone company, SoftBank.
The move was swiftly welcomed by new prime minister Theresa May and chancellor Philip Hammond, who revealed they held discussions with Softbank CEO Masayoshi Son over the weekend.
May had pledged during her leadership campaign to have a "proper industrial strategy" to increase the UK government's ability to prevent international takeovers.
"This is clearly a vote of confidence in Britain. It will be the biggest ever Asian investment in the UK," said May's spokeswoman.
"This is good news for British workers, good news for the British economy. It shows – as the prime minister has been saying – that we can make a success of leaving the EU."
Hammond echoed the prime minister's sentiment. “Just three weeks after the referendum decision, it shows that Britain has lost none of its allure to international investors," he said.
The pair welcomed a commitment from SoftBank to keep Arm headquartered in Cambridge, and to double the company's staff within five years, including increasing UK staff.
However, the company's founder Hermann Hauser was critical of the sale, claiming it was a sign of the weakness of the British economy in the wake of the Brexit vote.
Expanding on his tweeted comment, Hauser told the Financial Times the purchase was an "unintended consequence" of Brexit, and made Britain "a smaller player in the tech sector".
“The future of Arm could have been determined by the UK management team. Now it will be determined in Japan,” he said.
"SoftBank is a reasonable acquirer but this is sadly one of the unintended consequences of Brexit. The fall in sterling has made this very cheap and while I suspect they were considering it for a long time, they have acted now because the opportunity is there.
"It’s a sad loss of independence. Britain is becoming a smaller and smaller player in the tech sector. But on what grounds would you intervene? Internationally it’s not sustainable."
Vince Cable, the former business secretary and Liberal Democrat MP, was also critical of the deal, saying the move showed the UK could never grow its own Facebook or Google.
"This is the last big British tech company which is standing," he said. "You cannot ignore the potential consequences. That was shown by our experience in the past with Pfizer and Autonomy.
“It’s worrying that we are simply unable to grow large tech companies in Britain. We are never going to grow a Facebook or a Google. Every time these businesses get to a certain size they get snapped up."
SoftBank CEO Masayoshi Son said the move had been long-planned and was not a consequence of Brexit.
Arm Holdings makes its revenue – from licensing its chip designs to other tech giants, including Apple and Samsung – in dollars, while paying most of its costs in pound sterling. The fall in the pound following Brexit not only makes the company cheaper, but is also likely to boost its profitability – making it a more appealing target.
James Ball is a special correspondent for BuzzFeed News and is based in London. PGP: here
Contact James Ball at James.Ball@buzzfeed.com.
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