Softbank Snaps Up Vision Fund's Stake In Arm Ahead Of IPO

Softbank has reportedly acquired the 25 percent stake its Vision Fund holds in Arm, less than a month before the British processor designer's hotly anticipated initial public offering (IPO).

Citing a draft filing as well as everyone's favorite "people familiar with the matter," Bloomberg reports the transaction, which values Arm at $64 billion, could be made public as early as Monday.

In addition to the purchase, the draft also highlights some incongruities with Softbank's claims around Arm's financial virility. While Softbank claimed [PDF] in May that Arm's revenues had grown 5.7 percent during its 2023 fiscal year, the filing — if accurate — shows the UK chip shop's revenues actually declined by one percent year-on-year to $2.68 billion. However, as Bloomberg reports, this may be down to differences in US and international standards for financial reporting.

News that Arm's sales were looking down isn't all that surprising, especially given the state of the broader semiconductor market. Over the past several quarters, excess inventories of certain components and slow demand across multiple segments, including smartphones, PCs, servers, and memory, have battered chip houses and semiconductor equipment manufacturers' bottom lines.

Earlier this month, Qualcomm, which makes extensive use of Arm intellectual property in its mobile processors, saw its profits plunge nearly 60 percent, after smartphone and IoT sales declined again during the Snapdragon giant's third quarter of its fiscal year.

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The news comes just weeks before Arm is due to be listed on the New York Stock Exchange, with a valuation of as much as $70 billion.

Softbank acquired Arm in 2016 for approximately $32 billion, and later sold a quarter of its stake in the company to its Vision Fund.

In 2020 Softbank announced its intent to offload Arm to Nvidia in a deal initially valued at $40 billion. However, the M&A bid collapsed in early 2022 after Nv failed to garner nearly any of the necessary regulatory approval to move forward — which ultimately cost the GPU vendor $1.25 billion in costs. By that point, Arm was valued at closer to $66 billion.

In March, Arm confidentially filed for a public listing. And despite hopes among many to see the biz's stock appear on the London Stock Exchange, Arm top boss Rene Haas revealed the Neoverse outfit would pursue a US-only listing, shortly after.

While it was no secret Softbank intended to retain a majority control over Arm, Bloomberg reports that as few as 10 percent of the company's shares will be available for purchase. Several Big Tech players, including  Nvidia, Apple, Samsung, and Amazon have all expressed interest in becoming anchor investors in the company's IPO. ®