Masayoshi Son, President and CEO of SoftBank Group Corp., gestures while speaking during a press conference in London on Monday July 18, 2016.
Chris Ratcliffe | Bloomberg | fake pictures
SoftBank hired Goldman Sachs to explore both an initial public offering and a sale of British chip designer Arm Holdings, according to people familiar with the matter.
SoftBank has been preparing to distribute Arm in an initial public offering, but recently began exploring put options after receiving interest from an outside party, said two people, who asked not to be identified because the discussions are private. It is unclear whether the company or external entity is interested in buying all or just part of Arm, which was acquired by SoftBank for approximately $ 32 billion four years ago.
The Wall Street Journal first reported that SoftBank had hired Goldman to measure selling interest. Spokespersons for SoftBank and Goldman Sachs declined to comment.
SoftBank is looking for more cash to help companies in its $ 100 billion Vision Fund, many of which have struggled since the pandemic and quarantines began. SoftBank agreed to sell about $ 21 billion of its T-Mobile stake after merging Sprint with the third-largest wireless company in the United States last year. The Japanese tech holding company has said it plans to sell up to $ 41 billion in assets. SoftBank is also buying billions of shares, which has helped boost its shares in recent months.
SoftBank bought Arm as an investment in the so-called Internet of Things – the idea that wireless connectivity between everyday items like refrigerators, cars, and other devices would lead to useful new scenarios. Arm said last week that it planned to transfer its IoT divisions to SoftBank. The announcement was made to focus the company on an initial public offering within a year, one of the people said.
Few companies could afford to buy the entire Arm without intense regulatory scrutiny. Arm has found a niche as a neutral microprocessor designer working with many of the world’s largest equipment manufacturers, including most of the world’s smartphones. Apple, Samsung and Qualcomm use Arm technology in various ways.
There have been few major semiconductor deals in recent years after a wave of consolidation from 2014 to 2016. Part of the slowdown in recent years is related to concerns from CFIUS (Committee on Foreign Investment in the United States) about sharing technology. with Chinese companies. Still, Analog Devices announced that it planned to acquire Maxim Integrated Products for around $ 21 billion on Monday, a deal that could bring activity back to market.
CLOCK: Why is SoftBank’s purchase of ARM positive?
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