Japan’s Softbank is to buy ARM Holdings, one of the UK’s biggest technology companies, for £24bn ($32bn).
The board of ARM is expected to recommend shareholders accept the offer – close to a 43% premium on its closing market value of £16.8bn on Friday.
The Cambridge-based firm designs microchips for an array of mobile phone devices including Apple’s iPhone.
ARM, which was founded in 1990, employs more than 3,000 people.
ARM said it would keep its headquarters in Cambridge and that it would at least double the number of its staff over the next five years.
The deal will be funded by Softbank’s own cash reserves and a long term loan from Japan’s Mizuho Bank.
Softbank is one of the world’s biggest technology companies and is run by its founder, Japanese entrepreneur Masayoshi Son.
It has previously acquired Vodafone’s Japanese operations and the US telecoms company Sprint. The $20bn deal was the biggest foreign acquisition by a Japanese firm at the time.
Softbank intends to preserve the UK tech firm’s organisation, including its existing senior management structure and partnership-based business model, ARM said.
Masayoshi Son, chairman and chief executive of Softbank, 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.”
Analysis: Simon Jack, BBC business editor:
ARM is arguably the most precious jewel in the crown of British technology.
Softbank considers ARM well placed to exploit the “internet of things” – the embedding of microchips in whole new categories of household and business devices.
But the proposed takeover poses a dilemma for the new government.
Along with high executive pay, Prime Minister Theresa May has put foreign takeovers on her radar of business dealings that may be bad for the national interest.
However, the government will be keen to show that the recent Brexit vote has not deterred foreign investment.
Barring government intervention, the final decision will be made by shareholders.
Mr Son added: “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”
Chancellor Phillip Hammond reacted to the news of the takeover by saying it showed UK companies had lost none of their “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,” he added.