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Britain's Arm, which named a new CEO on Tuesday, said it would
go public before March 2023 and SoftBank CEO Masayoshi Son
indicated that would be in the United States, most likely the
Nasdaq.
SoftBank acquired Arm, whose technology powers Apple's iPhone
and nearly all other smartphones, in 2016 for $32 billion.
The collapse of its sale marks a major setback
https://www.reuters.com/markets/
europe/arm-deal-collapse-leaves-softbank-asset-sales-disarray-2022-02-08
for the Japanese conglomerate's efforts to generate funds at
time when valuations across its portfolio are under pressure.
Many SoftBank portfolio companies are trading below their
listing price, with office-sharing firm WeWork, ride hailer Grab
and used-car platform Auto1 all down last quarter.
The cash-and-stock deal with Nvidia was announced in 2020, but
the U.S. Federal Trade Commission sued to block it in December,
arguing that competition in the nascent markets for chips in
self-driving cars and a new category of networking chips could
be hurt.
The buyout also faced scrutiny in Britain and the European Union
and had yet to receive approval in China, which has previously
withheld approval of cross-border chip acquisitions.
The value of the sale, which depended on Nvidia's stock price,
was originally pegged at about $40 billion but rose with
Nvidia's stock price to about $80 billion late last year, though
the California company's stock has fallen since.
On a company earnings call on Tuesday, SoftBank CEO Son, who had
said the company initially considered listing Arm but opted to
sell it instead due to the pandemic, sought to put a positive
spin on the scrapped sale.
He said Arm would power revolutions in areas such as cloud
computing and the metaverse and that it would be the most
significant IPO the chip industry has ever seen.
SoftBank said it would recognise a $1.25 billion breakup fee
that Nvidia had deposited as profit in the fourth quarter.
NEW CEO
Arm in a separate statement that it had appointed Rene Haas to
replace Simon Segars as chief executive officer and member of
the board, effective immediately. An industry veteran, Haas
joined Arm in 2013 and previously worked for seven years at
Nvidia.
"We are excited about the opportunity to be a publicly listed
company again," Haas said in an interview with Reuters.
SoftBank said Arm's net sales surged 40% to $2 billion in the
nine months to December.
An Arm acquisition would have put Nvidia into even more intense
competition with rivals in the data center chip market such as
Intel and Advanced Micro Devices Inc .
Arm licenses its architecture and technology to customers such
as Qualcomm Inc, Apple and Samsung Electronics Co Ltd that
design chips for devices from mobile phones to computers.
Nvidia has become the most valuable U.S. chip company on the
strength of its graphic processor chips. Although still seen as
crucial for gaming, graphic processors have become much more
widely used for artificial intelligence and other advanced
fields.
Nvidia said in a statement that it would retain its 20-year Arm
license.
The collapse of the deal underscores again the difficulty that
companies face in convincing antitrust regulators and
governments to approve large tech deals, especially in the
semiconductor industry.
Last week, a $5 billion deal between Taiwan GlobalWafers and
German chip supplier Siltronic fell apart after German
regulators failed to approve it on time.
In 2018, Qualcomm walked away from a $44 billion deal to buy NXP
Semiconductors after failing to secure Chinese regulatory
approval, and former U.S. President Donald Trump blocked
microchip maker Broadcom's proposed takeover of Qualcomm.
(Reporting by Anirudh Saligrama in Bengaluru and Jane Lanhee Lee
in Oakland, California, and Josh Horwitz in Shanghai; editing by
Gerry Doyle and Jason Neely)
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