NEW YORK (Reuters) – SoftBank Group Corp has acquired the remaining 25% stake in Arm Ltd from its Vision Fund unit, valuing the chip designer at $64 billion, according to anonymous sources. The details of the transaction will be disclosed when Arm publicly files for its stock market launch, with the sources requesting anonymity as these discussions are confidential. It is expected that SoftBank will now retain a larger stake in Arm, potentially up to 90%, and will sell fewer shares in the initial public offering (IPO). The capital raise from the IPO is anticipated to be lower than the previously planned range of $8 billion to $10 billion.
This acquisition indicates SoftBank’s commitment to Arm and could contribute to its continued growth in the chip design industry. Arm, a leading player in the global semiconductor market, is known for its advanced designs and intellectual property licensing business model. Its technology is used in various devices, including smartphones, tablets, and data center servers.
SoftBank initially acquired Arm in 2016 for $32 billion, making it one of the largest deals in the semiconductor industry. Since then, SoftBank has sought to monetize its investment in Arm and has been exploring various options, including a potential IPO. The decision to acquire the remaining stake from the Vision Fund suggests confidence in Arm’s future prospects and the potential for significant returns on its investment.
Arm’s IPO is highly anticipated by investors and industry analysts alike. The company’s advanced chip designs are widely regarded as critical components in the development of emerging technologies such as artificial intelligence, autonomous vehicles, and the Internet of Things. The valuation of $64 billion indicates the market’s recognition of Arm’s significant value and growth potential.
While SoftBank’s decision to retain a larger stake in Arm may result in a lower capital raise from the IPO, it also demonstrates the company’s long-term strategic vision. By maintaining a majority ownership, SoftBank can potentially exert more control over Arm’s operations and direction. This acquisition aligns with SoftBank’s broader strategy of investing in technology companies with disruptive potential and leveraging these investments to generate substantial returns.
The filing for Arm’s stock market launch is eagerly awaited, as it will provide further insights into the company’s financials, growth plans, and competitive positioning. The chip designer’s IPO is expected to be one of the significant technology listings of the year, attracting substantial interest from investors seeking exposure to the fast-growing semiconductor industry.
Overall, SoftBank’s acquisition of the remaining stake in Arm demonstrates its confidence in the chip designer’s future and its commitment to capitalizing on the growing demand for advanced semiconductor technology. As the global technology landscape continues to evolve rapidly, Arm is well-positioned to play a central role in driving innovation and shaping the future of various industries.
(Reporting by Anirban Sen in New York, additional reporting by Milana Vinn; Editing by Chizu Nomiyama)
Credit: The Star : Tech Feed
