SoftBank hires Goldman Sachs to explore Arm’s selling options: Sources

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Masayoshi Son, President and CEO of SoftBank Group Corp., gestures during a press conference in London, Monday, July 18, 2016.Chris Ratcliffe | Bloomberg | Getty Images

SoftBank hired Goldman Sachs to explore both an initial public offering and a sale by British chip designer Arm Holdings, according to people familiar with the subject.SoftBank is preparing to launch Arm into an IPO, but has recently started exploring put options after receiving interest from an outside party, said two people, who asked not to be named because the talks are private. It is unclear whether the company or the outside entity is interested in purchasing all or part of Arm, which was acquired by SoftBank for approximately $ 32 billion four years ago.

The Wall Street Journal first reported that SoftBank had hired Goldman to assess the interest in the sale. Spokespeople for SoftBank and Goldman Sachs declined to comment.

SoftBank is seeking more cash to help businesses in its $ 100 billion Vision Fund, many of which have experienced difficulties since the start of the pandemic and quarantines. SoftBank has agreed to sell approximately $ 21 billion of its stake in T-Mobile after merging Sprint with the third largest US wireless company last year. The Japanese technology holding company has announced plans to sell up to $ 41 billion in assets. SoftBank is also buying billions of shares, which has helped increase its shares in recent months.

SoftBank bought Arm as an investment in the so-called Internet of Things – the idea that wireless connectivity between everyday items such as refrigerators, cars and other devices would lead to new scenarios useful. Arm announced last week that it plans to transfer its IoT divisions to SoftBank. The announcement was made to focus the company on a first public offering in more than a year, said one of the people.

Few companies could afford to buy all of Arm without a thorough regulatory review. Arm has found a niche as a neutral microprocessor designer that works with many of the largest equipment manufacturers, including the majority of the world’s smartphones. Apple, Samsung and Qualcomm all use Arm technology in different ways.

There have been few large semiconductor contracts in recent years after a wave of consolidation from 2014 to 2016. Part of the slowdown in recent years is linked to concerns of CFIUS (The Committee on Foreign Investment in the United States) regarding the sharing of technology with Chinese companies. However, Analog Devices announced plans to acquire Maxim Integrated Products for around $ 21 billion on Monday – an agreement that could bring activity back to the market.

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