SoftBank was probably thinking of breathing after having officially given up selling ARM to Nvidia for 40 billion dollars at the beginning of February, nay! The Japanese conglomerate quickly decided to return to its initial project, to introduce ARM on the stock market, so far so good. You still have to decide which market to turn to… This is where things get complicated, again.
UK wants its tech champion by its side
For Masayoshi Son, CEO of SoftBank, things seem pretty clear. In ARM’s latest results he explained that ” The US is the market we’re looking at for ARM’s IPO, and most likely the Nasdaq “. New York appears to be the logical destination for the chip designer whose licenses are used in 95% of the world’s smartphones.
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Yet teeth may cringe in London. ARM was established in 1990 in Cambridge, England, 50% of its employees are in the UK. When SoftBank bought the company in 2016 for $32 billion, the UK government welcomed the news.
Since then, the shortage of semiconductors and the notion of digital sovereignty have made their way. At 10 Downing Street, we would like to keep ARM in its native land, London, a first-rate financial center and one of Europe’s technological centers, with arguments to put forward.
The Nasdaq sirens remain complicated to compete with. The goodwill of the British government could have a hard time convincing SoftBank. One possibility on the table is that of a double listing, on both sides of the Atlantic. This was the option chosen by ARM before its takeover by the Japanese group.
ARM co-founder Jamie Urquhart told CNBCfatalistic, “ The decisions SoftBank makes will naturally consider their own needs rather than those of ARM itself. “. Qualcomm CFO Akash Palkhiwala is more optimistic, “ They have options and they are all good options in my mind “. For him, ARM’s position is ” terrific “. The American company had already shown interest in the British during the Nvidia turmoil.
ARM China in the midst of an independence crisis
Great, maybe with one detail. ARM has a serious thorn in its side: its Chinese subsidiary. It has actually been a joint venture since 2018 and its 51% takeover by a Chinese consortium for $775.2 million.
the South China Morning Post reports that its CEO, Allen Wu, said he supports ARM’s IPO, adding ” We hope that ARM will also support ours “. The leader wants to introduce his joint venture in Shanghai or Hong Kong around 2025.
The case is complicated, since ARM tried to oust the CEO in June 2020. The parent company accuses him of conflicts of interest. His board suspended him, but Allen Wu hangs on. He retained the corporate seals and retained the status of legal representative of ARM China, expressing desires for autonomy. According to South China Morning Postthe subsidiary would weigh 25% of ARM’s annual revenue.
SoftBank left the hell of the regulatory authorities, thinking to satisfy everyone. From now on, it will be necessary to struggle to negotiate with a country, the United Kingdom and a rebellion to carry out its operation. On March 1, SoftBank told CNBC that a final decision on ARM’s listing has not been made. Many are waiting for it.