SoftBank Offers to Acquire ARM Holdings for GBP 24.3 Billion (USD 31.4 Billion) in Cash

Led by Chairman and CEO, Masayoshi Son, SoftBank is focused on the transition from a Japanese company with some international assets to a global entity that can grow sustainably over the long-term. By innovating and growing, it is SoftBank’s objective to continue as the leading corporate group at the forefront of the information revolution.

SoftBank is listed on the Tokyo Stock Exchange with a market capitalisation of JPY 6.9 trillion (c.GBP 49.4 billion) as of 15 July 2016. For the fiscal year ended 31 March 2016, SoftBank reported total assets of JPY 20.7 trillion (c.GBP 148.6 billion), group revenue of JPY 9,154 billion (c.GBP 65.7 billion), gross profit of JPY 3,527 billion (c.GBP 25.3 billion), and adjusted earnings before interest and tax of JPY 1,042 billion (c.GBP 7.5 billion).

SoftBank is headquartered in Tokyo, Japan and has over 63,000 employees on a consolidated basis.

9. FINANCING

Part of the consideration payable under the Scheme is being financed by debt to be provided under an up to ¥1,000,000,000,000 (c.£7.3 billion) facility arranged by Mizuho Bank, Ltd. pursuant to a term loan agreement entered into between SoftBank and Mizuho Bank, Ltd. dated on or before the date of this Announcement (the “ Facility Agreement”).

Under the Facility Agreement, SoftBank has agreed that it shall be a condition to the drawing under the Facility Agreement that, except as consented to by Mizuho Bank, Ltd., SoftBank shall not have waived or amended any term of the Scheme or the Takeover Offer in a manner which is materially adverse to the interests of Mizuho Bank, Ltd. unless such action is required by the Code, the Panel, a court or any other applicable law, regulation or regulatory body or where the Panel, the Code, the Court, any other court or any other applicable law, regulation or regulatory body would not allow SoftBank to invoke or rely on a term in the Scheme or Takeover Offer.

The balance of the consideration will be funded from SoftBank’s existing cash resources.

Mizuho Securities Co., Ltd, financial adviser to SoftBank, has confirmed that it is satisfied that sufficient resources are available to SoftBank to satisfy in full the payment of the cash consideration payable in respect of the Scheme. Full implementation of the Scheme will result in cash consideration amounting to approximately £24.3 billion being payable by SoftBank to ARM Shareholders and participants in the ARM Share Schemes.

10. INFORMATION RELATING TO ARM

Founded in 1990, ARM is the world leader in semiconductor intellectual property technology. ARM’s operating business involves the design and licensing of intellectual property to a network of partners who utilise ARM’s intellectual property designs to create and manufacture system-on-chip designs. In addition to processor intellectual property, ARM provides a range of tools as well as physical and systems intellectual property to enable optimised system-on-chip designs.

ARM’s market-leading intellectual property can be re-used by customers in a variety of different products and end markets, generating long term recurring royalty revenues. ARM is committed to strategies focused on long term growth and continually looks to reinvest back into the business, including through recruiting highly skilled engineers to develop new and innovative technology.

ARM is listed on the London Stock Exchange with a market capitalisation of £17.0 billion as of 15 July 2016. For the financial year ending 31 December 2015, ARM reported revenue of £968.3 million, normalised gross profit of £931.3 million, and normalised profit from operations of £499.7 million.

ARM is headquartered in Cambridge, UK, and has approximately 4,064 employees around the world.

At the date of this Announcement, ARM has in issue and admitted to trading on the main market of the London Stock Exchange 1,407,340,208 ordinary shares of 0.05 pence each (net of 5,868,921 ARM Shares held in treasury). The ISIN of the ARM Shares is GB0000595859.

ARM has an ADR programme for which The Bank of New York Mellon acts as the depositary. Each ARM ADR evidences one ARM ADS, which represents threeunderlying ARM Shares. ARM ADSs trade on the NASDAQ Global Select Market. The trading symbol for these securities is ARMH and the ISIN is US 0420681068.

11. ARM SHARE SCHEMES

Participants in any of the ARM Share Schemes will be contacted regarding the effect of the Acquisition on their rights under those plans and provided with further details concerning the proposals which will be made to them in due course.

Appropriate proposals will be made to the holders of awards and/or options under the ARM Share Schemes which remain unvested and/or unexercised. In particular, in respect of options granted under the ARM Savings Related Share Option Schemes prior to the date of this Announcement, SoftBank will make a one-off cash payment to participants who exercise their options conditional on the Court granting the Scheme Court Order of an amount equal, on a net of tax basis, to the additional profit which such participants would have received had they been able to exercise their options over the full number of ARM Shares otherwise available on maturity of the relevant savings contract.

12. OFFER-RELATED ARRANGEMENTS

Confidentiality Agreement

SoftBank and ARM have entered into a confidentiality agreement dated 14 July 2016 pursuant to which SoftBank has undertaken, amongst other things, to: (a) keep confidential information relating to the Acquisition and ARM and not to disclose it to third parties (other than certain permitted parties) unless required by law or regulation; and (b) use the confidential information only in connection with the acquisition of the whole of the issued and to be issued share capital of ARM.

Co-operation Agreement

Pursuant to the Co-operation Agreement, SoftBank has agreed to co-operate with ARM to take all such steps as are reasonably necessary to implement the Acquisition in substantially the form contemplated by this Announcement.

SoftBank and ARM have agreed to certain undertakings to co-operate and provide each other with reasonable information and, subject to ARM complying in all material respects with its obligations to provide such information and assistance as SoftBank may reasonably require, SoftBank has agreed to take all steps necessary in order to obtain all relevant consents, approvals, clearances, permissions, waivers and/or filings in relation to regulatory clearances and authorisations. SoftBank has also agreed to provide ARM with reasonable information, assistance and access for the preparation of the key shareholder documentation. In addition, SoftBank will as soon as practicable and in any event by no later than the date of the Scheme Document, subject to the consent of the Panel, make and publish the Post-Offer Undertakings. SoftBank will take all such steps as are necessary for these purposes in order to obtain the Panel’s consent to the making of the Post-Offer Undertakings.

The Co-operation Agreement also contains provisions that will apply in respect of the ARM Share Schemes, directors’ and officers’ insurance and certain other arrangements related to employees, as well as provisions which pertain to SoftBank and ARM’s agreement in relation to the payment of the Dividend and any Ordinary Course Dividends.

SoftBank has the right to terminate the Co-operation Agreement following any withdrawal, or other modification that is adverse to SoftBank, of the Board of ARM’s recommendation of the Scheme. The Co-operation Agreement will also terminate if, amongst other things: (i) if the Scheme is not approved by the requisite majority of ARM Shareholders at the Court Meeting or the relevant resolutions are not passed by the requisite majority of ARM Shareholders at the General Meeting and, within two Business Days of a request from SoftBank, ARM fails to give its consent to implement the Acquisition by way of the Takeover Offer rather than the Scheme; (ii) the Scheme is withdrawn or lapses in accordance with its terms prior to 17 November 2016 (other than where: (A) such lapse or withdrawal is in connection with SoftBank electing, with the consent of the Panel and the prior written consent of ARM, to implement the Acquisition by way of a Takeover Offer rather than the Scheme; or (B) (unless such lapse or withdrawal is as a result of any of Conditions 2.1 to 2.3 of Part A of Appendix 1 to this Announcement) being invoked by SoftBank) it is otherwise to be followed within five Business Days by an announcement under Rule 2.7 of the Code made by SoftBank or a person acting in concert with SoftBank to implement the Acquisition by a different offer or scheme on substantially the same or improved terms); or (iii) if the Effective Date has not occurred by 17 November 2016.

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