Prime Minister Theresa May has welcomed SoftBank's £24 billion tie-up with Cambridge-based ARM Holdings despite vowing to defend UK firms from foreign takeovers.
The PM's official spokeswoman said the swoop by the Japanese firm for one of the UK's biggest technology companies "was a clear vote of confidence in Britain" and showed the UK could make a success of leaving the European Union.
She said May had given her support to the deal after a conversation with SoftBank's chief executive Masayoshi Son on Sunday, where she learned of the Japanese firm's intent to double ARM's UK workforce and keep its headquarters in Cambridge.
Her comments come just a week after she pledged to devise a "proper industrial strategy" to defend UK companies from being snapped up by foreign businesses, including firms in Britain's pharmaceutical sector.
Speaking during her campaign to become PM, May said: "Transient shareholders ... are not the only people with an interest when firms are sold or closed. Workers have a stake, local communities have a stake, and often the whole country has a stake."
Days before she became PM, May said she wanted an industrial strategy that "wouldn't automatically stop the sale of British firms to foreign ones, but (would) be capable of stepping in" to defend sectors of importance to the national economy.
Asked whether May did not want to protect the UK tech sector from foreign takeovers, the PM's official spokeswoman said: "We don't see it like that. The Prime Minister was clear that some takeovers have been in the national interest. I think the point that she was making is that we should look very clearly at each case and be driven by what is in the national interest.
"If you look at the facts of this one, it is very much in the national interest."
SoftBank has pledged to embark on a major recruitment drive and hold on to ARM's existing management team following its swoop for the British tech firm, which supplies technology for Apple's iPhone.
The deal was branded "the biggest ever Asian investment in the UK" by May and valued the technology firm at 1700p per share, a 43% premium on Friday's closing share price of 1189p.
The combined group hopes the acquisition will allow it to capitalise on opportunities in the "internet of things" - giving everyday objects a connection to the internet.
Shares in ARM Holdings jumped 42% following the announcement.
Stuart Chambers, chairman of ARM, said: "SoftBank has given assurances that it will invest considerably in the business, including doubling the UK headcount over the next five years and maintaining ARM's unique culture and business model."
Decision by SoftBank to invest in @ARMHoldings shows UK has lost none of its allure to global investors - Britain is open for business
-- Philip Hammond (@PHammondMP) July 18, 2016
However, experts have warned that the deal could lead to a "brain drain" if ARM Holdings' businesses are moved out of the UK.
Analysts also expect more British firms to become foreign takeover targets, with the plunge in the value of the pound making UK firms cheaper following the Brexit vote.
Chancellor Philip Hammond said the takeover would "turn this great British company into a global phenomenon".
He added: "Just three weeks after the referendum decision, it shows that Britain has lost none of its allure to international investors. Britain is open for business - and open to foreign investment."
As part of the deal, ARM Holdings will keep its headquarters in Cambridge, while efforts will be made to grow ARM's workforce outside of the UK.
The firm, which employs 3,000 people in the UK, saw its results come in ahead of expectations in April as pre-tax profits lifted 14% to £137.5 million in the first quarter year-on-year, while revenues also stepped up 22% to £276.4 million over the period.
ARM's directors will recommend the deal is accepted by ARM shareholders at its forthcoming general meeting. The deal will also need to win the backing of regulators.
Masayoshi Son, chairman and chief executive of SoftBank, said the investment marked its strong commitment to the UK and the "competitive advantage" of the science and technology industries in Cambridge.
Arm Holdings was available to SoftBank at ¥925 billion discount or £5 billion less than at beginning of year after pound's 21% slide v Yen
-- Faisal Islam (@faisalislam) July 18, 2016
However, Mark Skilton, a professor of practice at Warwick Business School, warned that it could lead to a loss of skills and knowledge from the UK.
He added: "The concern of brain drain and ARM business moving from the UK must be considered in this equation based on its know-how and leadership in chip design."