Arm, the UK chip design company, is leading the market higher after it signed a new licensing agreement with Microsoft.
The two companies have been partners since 1997 - with Microsoft an important part of the "Arm ecosystem" as the company puts it - and the new deal gives Microsoft increased access to Arm's technology, rather than licensing products one by one.
Results this week from US technology giants such as Apple and indeed Microsoft have already given a lift to their UK peers, but today's news has sent Arm up by 21p to 337.5p - a near 7% rise. Arm has also been the subject of takeover talk in recent weeks, with Apple and Intel both mentioned, although traders are generally sceptical of the suggestions. Investec said:
Microsoft has announced a multi-year contract to licence Arm architecture. There were no further details, so we can only assume this may lead to Microsoft opening up its Windows 7 platform to Arm, although this has not been commented upon. If this were to happen, we would expect the near term sales upside to be minimal, but it would give Arm an additional medium term revenue opportunity and further strategic value.
