According to three people familiar with the situation, SoftBank Group Corp is planning to name Goldman Sachs Group Inc as to the main underwriter on Arm Ltd’s initial public offering, which could be worth as much as $60 billion.
SoftBank’s proposal to sell Arm to Nvidia Corp for $40 billion faltered last month because of antitrust regulators’ objections in the United States and Europe. SoftBank has stated that it plans to float Arm on the Nasdaq by March 2023.
According to the sources, SoftBank recently interviewed investment banks for Arm’s IPO and requested them to commit to providing a credit line as part of their promises. The amount of a credit line extended by Goldman Sachs could not be determined.
Last month, Bloomberg News reported that SoftBank had requested an $8 billion margin loan connected to Arm’s IPO stock. SoftBank’s plans are subject to market conditions, according to the individuals, who requested anonymity since the preparations are classified. SoftBank may decide not to proceed with the transaction. Goldman Sachs, SoftBank, and Arm all declined to comment.
Arm, whose technology underpins Apple’s iPhone and practically all other handsets, was taken private by SoftBank in 2016 for $32 billion.
According to SoftBank, Arm’s net revenues increased by 40% to $2 billion in the nine months ending in December, owing to strong chip demand. While this is encouraging for the IPO, it is unlikely to compensate SoftBank for the lost Nvidia business in the near term. This is because, under its cash-and-stock merger agreement, Arm was worth more than $80 billion at one point due to a surge in Nvidia shares.
Last month, SoftBank founder Masayoshi Son addressed investors about Arm’s IPO, saying, “We will aim for the biggest IPO ever in semiconductor history.” SoftBank is likely to list Arm in the United States, but the venue for the IPO has yet to be determined, according to the sources.
SoftBank announced a deal to sell Arm to Nvidia in 2020, but the US Federal Trade Commission filed a lawsuit to stop it late last year, claiming it would harm competition in emerging markets for self-driving vehicle processors and a new type of networking chips.
The deal was also scrutinised by regulators in the United Kingdom and the European Union, and it had yet to be approved in China. Following the cancellation of the acquisition, Arm named Rene Haas to succeed Simon Segars as CEO. Haas, a seasoned industry veteran, joined Arm in 2013 after seven years at Nvidia. Customers including Qualcomm Inc, Apple Inc, and Samsung Electronics Co Ltd, design chips for devices ranging from mobile phones to laptops, licence Arm’s architecture and technologies.