Mammoth British technology firm ARM Holdings is set to be bought by Japanese giant Softbank.

ARM’s board is expected to recommend that shareholders accept the offer – which, at £24billion, is around a 43% premium on its £16.8bn valuation when the markets closed on Friday.

Shares jumped 45% when the London Stock Exchange opened on Monday, adding £7.56bn to ARM's market value.

The Cambridge-based firm, founded in 1990, is one of the biggest tech companies you may have never heard of and designs the microchips used in the majority of smartphones, including the market-leading Apple and Samsung devices.

It will remain at its Cambridge base and look to double its staff base from the present level of 3,000 over the next five years while maintaining the existing senior management structure and business model.

Softbank, founded by Masayoshi Son, has a history of foreign acquisitions having bought US telecoms company Sprint.

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Chairman and chief executive Masayoshi Son said: "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.

"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 with the Softbank group as we invest to capture the very significant opportunities provided by the Internet of Things."

The growth of smart devices means chips are now embedded in increasing numbers of objects around the home.

 

Chancellor Phillip Hammond said of the prospective deal: "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."

Hammond opposed Brexit during campaigning for the recent referendum, which saw Britons choose to leave the European Union.