On Monday SoftBank and Cambridge-based ARM announced that they had agreed a deal which will see SoftBank buy ARM for approximately £24.3 billion.

Specialist in mergers and acquisitions in the technology sector Andrew McMillan of Pinsent Masons, the law firm behind Out-Law.com, said: “ARM is the UK’s biggest technology business and a global success tale, providing chips to the likes of Apple and Qualcomm. With its deal to buy ARM, SoftBank is demonstrating a fantastic degree of confidence in the UK tech market at a season when others are questioning its future in light of the UK’s vote to goaway the EU.”

“SoftBank has made previous attempts to expand its mobile operator business with the acquisition of Sprint in the US perhaps its most notable transaction. However, its efforts to expand that business possess been stifled by US regulators. In the European telecoms market the competition authorities are similarly concerned about consolidation of mobile network operators, as the recent rejection of the Three/O2 UK merger has highlighted. In that context it is not surprising to see SoftBank explore alternative options to mature its revenue streams by seeking target companies elsewhere in the mobile market price chain,” he said.

“ARM is already a highly successful company and SoftBank will see opportunities in the short-term for collaboration and synergies between the businesses. However, the takeover can also be viewed as a longer-term strategic acquisition by SoftBank and a bet on the future growth of ARM’s chip business as the internet of things grows. It is expected in the medium term that everyday items will become connected devices capable of transmitting and receiving data. Computer chips are likely to be a central technology on which the internet of things will develop, so the scope for growth in ARM’s market is clear,” McMillan said.

McMillan said that although foreign investment in the UK market is a welcome sign that the market is doing well, there is a risk that deals of this helpful will become less likely in future.

“At the moment UK technology businesses are heavily reliant on venture capital funding to assist them mature,” McMillan said. “The biggest proportion of VC funding stems from a fund allied to the European Investment Bank, which is an EU institution. With the UK scheduled to goaway the EU there is a risk that funding for UK tech begin-ups from VCs will diminish, making it harder for those companies to access the capital they desire to mature. The ability to scale is unit of the biggest challenges facing tech businesses in the UK today and this will become harder if current sources of capital focus elsewhere. This may in pivot impact upon how attractive these businesses are to acquirers such as SoftBank.”

In a statement SoftBank said its deal to buy ARM is “not subject to any antitrust or regulatory conditions”.

Masayoshi Son, chairman and chief executive of SoftBank, said the Japanese business had been a lengthy-term admirer of ARM and described the UK technology company as “by some distance the market-leader in its field”.

“ARM will be an excellent strategic fit within the SoftBank group as we invest to capture the very significant opportunities provided by the ‘internet of things’,” said Son.

Son said SoftBank was committed to doubling the number of public employed by ARM in the UK – currently around 3,000 – over the next five years. He said ARM would “remain an independent business within SoftBank” and persist to be headquartered in Cambridge.

ARM chairman Stuart Chambers described SoftBank’s bid for the company as a “compelling offer” for ARM shareholders.

“The [ARM] Board believes that by accessing entire the resources that SoftBank has to offer, ARM will be competent to further accelerate the operate of ARM-based technology wherever computing happens.”