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UK rumor has Apple eyeing takeover of ARM

by Ken Ray Apr 22nd 2010 at 8:00AM

Say hello to the rumor du jour: Apple is considering a bid for ARM Holdings. The Web site for the London Evening Standard says that investors across the pond seem to like the Apple/ARM idea; so much so that shares of the chip designer jumped from by 8 pence to just over £2.51 by midday, a 3.2% gain. [Share prices corrected –Ed.]

It's hard to tell where, exactly, the rumor came from. According to the paper, "the takeover speculation was fueled by stellar second-quarter figures from Apple (on Tuesday) smashing Wall Street's forecasts," though there was nothing about such a buy mentioned on Apple's earnings call.

Still, Apple is ARM's biggest customer, and traders in the UK seem to think the idea is a good one. The price would be pretty steep for an Apple acquisition, though. Traders mentioned in the piece say that ARM could fetch more than £5.2 billion, or roughly US$8 billion. While Apple's got the cash, its recent purchases have cost much less, such as the Quattro Wireless buy in January for around $275 million, and the 2008 purchase of P.A. Semi for a rumored $278 million.

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Say hello to the rumor du jour: Apple is considering a bid for ARM Holdings. The Web site for the London Evening Standard says that...
 

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xxdesmus

no chance in hell the EU and American regulators would let this through -- talk about anticompetitive and monopolistic.

April 22 2010 at 12:23 PM Report abuse rate up rate down Reply
1 reply to xxdesmus's comment
hmurchison

How would it be anti-competitive and monopolistic? If Apple acquires ARM then they acquire ARM. There's no way to logically ascertain whether their intentions are to thwart competition or foster it.

I'm seeing too many people take the liberty of "guessing" what Apple's intentions are. You're not The Amazing Kreskin.

We simply have to see how things unfold if the acquisition does happen.

April 22 2010 at 2:16 PM Report abuse rate up rate down Reply
mjh

Well I would imagine Apple would benefit by no longer having to pay to license the Arm products, since they would own it. In addition, if they were to continue to license the tech to other companies, they would be making money off of every other phone or mobile device that is out there that uses ARM. Basically they would assure themselves $$ from every smartphone purchase.

Honestly I don't see a downside for apple at all! Whethere its good for the market, or technology in general..maybe not. But for Apple's interest, it makes a lot of sense, to me at least.

April 22 2010 at 9:15 AM Report abuse rate up rate down Reply
2 replies to mjh's comment
tony d

Its not anti competitive. If Intel bought ARM, that would be anti competitive. Now if Apple were to use it in an anti competitive way thats a whole other issue. Not sure if you can block a sale because of what you'd think a company might do. If Apple bought a piece of ARM it could help in maybe eliminating the license fee, giving Apple an upper hand. Not sure if the regulators would go for that.

April 22 2010 at 2:55 PM Report abuse rate up rate down Reply
tony d

Whoops, replied to the wrong post. meant to be replying to xxdesmus. Sorry.

April 22 2010 at 2:58 PM Report abuse rate up rate down Reply
Mike

So how would this pass get approved by regulators with so many Apple competing devices being ARM based? I know ARM licenses companies such as Samsung to produce a sell chips, but I don't see how this helps competition. And since ARM licenses designs to be used a modified (like the A4 is), I don't see how Apple gains. Seems like either a purely financial moved (Apple betting ARM will become more popular in desktops, servers, and portables as the global energy crisis continues) or an attempt to control or limit competition.

April 22 2010 at 8:31 AM Report abuse rate up rate down Reply
Michael Rose

Sorry about that, you are all correct -- these British stock prices frighten and confuse us. :)

The pricing has now been edited.

April 22 2010 at 8:27 AM Report abuse rate up rate down Reply
Robs

Really, you might want to check numbers first. Trading prices are in pence (GBX), not pounds (GBP). The jump yesterday was by +8p to £2.51, or just shy of 3.2%

April 22 2010 at 8:20 AM Report abuse rate up rate down Reply
Nathan

"jumped from £8 to" should be "jumped by £8 to" (or omit "from")

April 22 2010 at 8:12 AM Report abuse rate up rate down Reply
1 reply to Nathan's comment
christophercjensen

haha, that would explain it. I was surprised that the stock increase was £243 (251-8=243)!

April 22 2010 at 8:26 AM Report abuse rate up rate down Reply
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