Three of the nation’s top banks are considering extending a syndicated loan worth ¥1 trillion (about $9.96 billion) to SoftBank Group Corp. in September so it can finance the takeover of British semiconductor company ARM Holdings plc, sources close to the matter said Thursday.
The loan represents a coordinated attempt by the trio — Mizuho Bank, Sumitomo Mitsui Banking Corp. and Bank of Tokyo-Mitsubishi UFJ — to support the internet and telecommunications conglomerate as it tackles one of the biggest foreign acquisitions ever made by a Japanese company.
SoftBank announced in July that it would buy ARM for around $31 billion, financing the acquisition with cash and a ¥1 trillion loan from Mizuho Bank.
Taking out a syndicated loan would make it easier for SoftBank to secure funds if needed in the future. Regional banks are also expected to participate in the effort, the sources said.
SoftBank Chief Executive Officer Masayoshi Son has expressed hope that ARM will become “the core of the core businesses” within the group as he sets his eyes on the “Internet of Things” networking fad, which involves building wireless connectivity into everyday devices.
Japanese banks have been facing a difficult time since the Bank of Japan adopted a negative interest rate policy earlier this year. Some have seen drops in both lending margins and outstanding loans, with regionals believed to be taking a bigger hit than the majors.
SoftBank plans to complete the acquisition on Sept. 5 after ARM seeks approval at a shareholders meeting Tuesday.
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