A semiconductor sector exchange traded fund was leading markets higher Monday after Japanese technology company SoftBank Group Corp. announced a deal to acquire Britain’s ARM Holdings (NasdaqGS: ARMH) for $32 billion.
SoftBank is seeking to expand into the so-called Internet of Things, or home devices from smart-thermostats to security cameras and domestic appliances that connect online, the Associated Press reports.
“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,'” Masayoshi Son, Chairman and CEO of SoftBank, said.
ARMH shares surged 41.3% Monday on the deal.
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Meanwhile, the VanEck Vectors Semiconductor ETF (NYSEArca: SMH), which includes a 4.8% tilt toward ARMH, gained 2.8% on Monday.
Additionally, the Direxion Daily Semiconductors Bull 3x Shares (NYSEArca: SOXL), which takes the leveraged 300% daily exposure of the PHLX Semiconductor Sector Index, surged 4.4%.
[related_stories]ARM is known as an innovator in the Internet of Things field, with its technology implemented in a majority of smartphones and digital cameras. Its digital technology is also utilized in augmented-reality headsets, biometric sensors, self-driving cars, commercial drones and smart watches.
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United Kingdom leaders and market observers have hailed the deal as a sign of ongoing support for Britain’s economy in a post-Brexit world.
“The transaction represents the first major acquisition following the referendum and whilst the purchase doesn’t constitute a resounding vote of confidence in the post-EU U.K., it does illustrate that the after-effects of the Brexit have not deterred all parties from continuing with business as usual,” David Cheetham, market analyst at XTB, told the AP.
VanEck Vectors Semiconductor ETF