Exclusive-Arm signs up big tech firms for IPO at $50 billion-$55 billion valuation -sources


FILE PHOTO: A smartphone with a displayed Arm Ltd logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

NEW YORK (Reuters) -Customers of Arm Holdings Ltd including Apple Inc, Nvidia Corp, Alphabet Inc and Advanced Micro Devices Inc have agreed to invest in the chip designer's initial public offering, according to people familiar with the matter.

Intel Corp, Samsung Electronics Co Ltd, Cadence Design Systems Inc and Synopsys Inc have also agreed to participate as investors in the offering, the sources added. The talks are ongoing and some other potential investors are also in discussions to invest in the IPO, the sources added.

SoftBank Group Corp, which owns Britain-based Arm, is targeting a valuation between $50 billion and $55 billion, Reuters reported earlier on Friday. Arm's clients have agreed to invest in that valuation range, the sources said.

While it is possible that demand for Arm's shares will lead to a higher valuation by the time the IPO prices, the move represents a climb-down from the $64 billion valuation at which SoftBank acquired the 25% stake in the company it did not already own from its $100 billion Vision Fund last month.

Apple, Nvidia and the other strategic investors have agreed to invest between $25 million and $100 million each in the blockbuster IPO, the sources said. Arm and SoftBank have set aside 10% of the shares to be sold in the IPO for its clients, Reuters has previously reported.

Amazon.com Inc, which had previously held talks to invest in the IPO, has decided not to participate, one of the sources said, requesting anonymity as the discussions are confidential.

A scramble among Arm's clients, comprising the world's biggest technology companies, to snap up shares in the IPO is testing the semiconductor designer's adherence to not picking sides in the chip industry.

The interest is fueled by a desire by companies to expand their commercial relationship with Arm and make sure rivals do not gain an edge, Reuters has previously reported.

While an investment in the IPO would not come with a seat on Arm's board or ability to dictate strategy, it could strengthen ties with each participating company and make it harder for a competitor to acquire Arm later.

Arm and SoftBank did not immediately respond to requests for comment.

AMD, Intel, Synopsys and Nvidia declined to comment. Alphabet, Amazon, Apple, Samsung and Cadence did not immediately respond to requests for comment. The Wall Street Journal reported on Arm's valuation target earlier on Friday.

(Reporting by Echo Wang in New York; Editing by Anirban Sen and Rosalba O'Brien)

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

   

Next In Tech News

Musk now says it's 'pointless' to build a $25,000 Tesla for human drivers
Google defeats lawsuit over gift card fraud
Russian court fines Apple for not deleting two podcasts, RIA reports
GlobalFoundries forecasts upbeat Q4 results on strong demand from smartphone makers
Emerson sharpens automation focus with offer for rest of AspenTech in $15 billion deal
Palantir shares surge to record as AI boom powers forecast raise
Tax fraud investigators search Netflix offices in Paris and Amsterdam, says source
Singapore's Keppel to buy Japanese AI-ready data centre
Tesla increases wages for staff at German gigafactory by 4%
Apple explores push into smart glasses with ‘Atlas’ user study

Others Also Read