SoftBank is considering fully or partially selling British chip designer Arm Holdings and has hired Goldman Sachs to advise it on further Arm deals, according to a report from the Wall Street Journal.
This comes as a bit of a surprise after Apple’s promise to swap to the Arm-based Apple Silicon within two years, though this isn’t the first time SoftBank has indicated potentially returning Arm to the public market. The Japanese company currently owns Arm in its entirety, after buying the company for $32 billion in 2016 as an investment in the Internet of Things (a term for the network made up of everyday devices like cell phones and cars).
SoftBank also runs the $100 billion Vision Fund, the world’s largest venture capital fund, with many of the companies it invests in currently struggling in the wake of the pandemic. This might explain SoftBank’s overtures of selling Arm, which also announced last week that it would be transferring its IoT units to SoftBank by the end of September to focus solely on chip design. Given the reason for SoftBank’s initial investment in Arm, it’s also possible that this transfer leaves SoftBank with little use for the rest of the company.
Arm designs the microprocessors that power most of the world’s smartphones, though WSJ assets that Vision Fund executives have long considered its revenue growth to be lackluster. Whatever the reason for the potential sale, SoftBank is currently planning to sell up to $41 billion in assets, as well as spend $4.8 billion on buying back its own shares.
Apple, Samsung and Qualcomm all make use of Arm technology, though any attempt on Apple or Samsung’s part to buy Arm outright would likely trigger intense regulatory scrutiny. Further, even with Apple Silicon, few companies have a need to own Arm outright, given the breadth of its business. A return to the public market is probably more likely, with sources telling CNBC that “the announcement was made to focus the company on an initial public offering more than a year from now.”