Arm IPO, Intel in Talks to Become Anchor Investor in SoftBank Group's Public Issue
SoftBank's Arm Chooses Wall Street over London, What It Means for European Markets
13 June 2023
Intel is in discussions with Arm, a subsidiary of SoftBank Group Corp, to potentially become an anchor investor in Arm's upcoming IPO, which aims to raise $8 billion to $10 billion on the Nasdaq.
SoftBank has selected Goldman Sachs, JPMorgan Chase, Barclays, and Mizuho Financial Group as the investment banks to assist with Arm's IPO, indicating the strategic importance of the listing.
The decision to go public on Wall Street instead of the London Stock Exchange may impact the aspirations of European markets, which aimed to attract high-value IPOs. The IPO allows private investors in the SoftBank-led Vision Fund to cash in on their investments in Arm.
Tech behemoth Intel is reportedly engaged in discussions with Arm, a subsidiary of SoftBank Group Corp, for potential participation as an anchor investor in Arm's highly anticipated initial public offering (IPO). Arm aims to generate a substantial amount of capital, ranging from $8 billion to $10 billion, through its IPO, which is slated to be listed on the Nasdaq exchange later this year. The prospective collaboration between Intel and Arm underscores the strategic importance of the IPO and its potential ramifications for the technology industry.
SoftBank Group Corp has enlisted the support of four prominent investment banks—Goldman Sachs, JPMorgan Chase, Barclays, and Mizuho Financial Group—to facilitate Arm's IPO. While initial speculations suggested that the IPO would take place on the London Stock Exchange, the decision to go public on Wall Street could potentially pose challenges to the aspirations of the UK and other European stock markets, which were vying to attract high-value IPOs to their shores.
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In 2020, SoftBank announced its intention to sell Arm to American chipmaker NVIDIA for a staggering $80 billion. However, the deal fell through in February 2022. Various media reports and expert opinions suggest that the Arm IPO may not yield the same level of profitability as the NVIDIA transaction, owing to factors such as rising interest rates and evolving global monetary policies. The IPO presents an opportunity for private investors in the SoftBank-led Vision Fund, who collectively hold 25% of Arm's shares, to monetize their investments.
Arm's designs play a critical role in the production of chips utilized by major semiconductor companies worldwide, including Intel, AMD, Nvidia, and Qualcomm. The potential investment of these companies in Arm's IPO and its impact on their existing commercial relationships with the chip designer remains uncertain. Arm confidentially filed for a listing on a US stock market in April, setting the stage for what is anticipated to be the largest IPO of the year. Intel's involvement and the interest expressed by other industry leaders underscore the substantial market anticipation surrounding Arm's public offering.