SoftBank Group Corp has acquired a 25 percent stake in Arm that it does not directly own from its Vision Fund unit, in a deal that values the chip designer at $64 billion (nearly 53,235 crore), according to people familiar with the matter.
Details of the deal will be revealed on Monday, when Arm unveils its blockbuster filing for a stock listing, the sources said. The sources requested anonymity because the discussions are confidential.
SoftBank now expects to sell fewer Arm shares in the initial public offering (IPO) and may retain a stake of up to 90% in the company, the sources said, adding that Arm would raise less capital through the IPO than previously planned. The $8 billion (nearly Rs 6,655 crore) to $10 billion (nearly Rs 8,318 crore) range.
SoftBank is currently in talks for an Arm IPO valued at $60 billion (nearly 4,991 billion rupees) to $70 billion (nearly 582.25 billion rupees), Reuters reported. . SoftBank took Arm private in 2016 for $32 billion (Rs 266.17 crore) and sold a 25% stake in the company to Vision Fund 1 (VF1) in 2017 for $8 billion.
The deal removes potential suspense in Arm shares post-IPO, as VF1 initially planned to cash out its stake in the stock market over time after listing, and SoftBank said it would remain a long-term strategic investor.
Reuters first reported in early August that SoftBank was in talks to buy a stake from the Vision Fund. The Wall Street Journal reported the financial terms of the deal earlier Friday.
The deal also represents a major win for VF1’s largest investors, including Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala. They suffered losses after many of SoftBank’s bets on startups such as workspace provider WeWork Inc and ride-sharing firm Didi Chuxing fell through.
Arm’s planned listing comes as the U.S. IPO market shows tentative signs of recovery after a year-and-a-half-year slump. Grocery delivery service Instacart and marketing automation company Klaviyo are also expected to list in New York in September, the sources said.
© Thomson Reuters 2023
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