ARM has today reached an agreement with Japan's SoftBank to be acquired at a cost of £24.3bn, subject to approval by shareholders.
The world-renowned British firm, headquartered in Cambridge, has accepted an offer price of £17 per share, representing a 41.1 per cent premium on ARM's all-time high, and a 43 per cent premium on Friday's closing share price.
ARM chairman Stuart Chambers described the acquisition as "a compelling offer for ARM shareholders, which secures the delivery of future value today and in cash."
"The board of ARM is reassured that ARM will remain a very significant UK business and will continue to play a key role in the development of new technology," he added.
SoftBank's valuation is set to make this the biggest ever purchase of a British technology company, and the deal arrives just weeks after the UK voted to leave the EU, sending the value of the pound into free fall.
Philip Hammond, the new chancellor, has been quick to welcome the deal, stating that "it shows that Britain has lost none of its allure to international investors. Britain is open for business - and open to foreign investment."
"SoftBank's decision confirms that Britain remains one of the most attractive destinations globally for investors to create jobs and wealth. And as ARM's founders will testify, this is the greatest place in the world to start and grow a technology business."
Founded in 1990 and home to over 300 employees, ARM's chip designs have become hugely popular in the majority of today's smartphones and smart home devices, resulting in ARM-designed chip shipments of 15 billion in 2015 alone.
In an effort to allay any fears of a foreign takeover, SoftBank has made assurances to create more than 1,500 additional ARM jobs in the UK over the next five years, with no immediate plans to alter ARM's business model or brand.
SoftBank chairman, Masayoshi Son, said: "We have long admired ARM as a world renowned and highly respected technology company that is 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'. "This is one of the most important acquisitions we have ever made, and I expect ARM to be a key pillar of SoftBank’s growth strategy going forward."
ARM Holdings' share price leapt by as much as 46 per cent at the opening of the London Stock Exchange, raising the firm's market value by almost £8bn.