Japan’s SoftBank drops sale of Arm, plans IPO

Feb 8, 2022, 12:54 AM | Updated: Feb 10, 2022, 5:25 am
The logo of SoftBank Corp. is seen at its shop in Tokyo, Monday, Feb. 7, 2022. Profit at Japanese t...

The logo of SoftBank Corp. is seen at its shop in Tokyo, Monday, Feb. 7, 2022. Profit at Japanese technology investor SoftBank tumbled 98% in the quarter through December, as the value of its sprawling investments declined and its planned sale of British company Arm collapsed. (AP Photo/Koji Sasahara)

(AP Photo/Koji Sasahara)

TOKYO (AP) — SoftBank’s planned sale of the British semiconductor and software design company Arm to U.S. chip maker Nvidia has fallen through, but the Japanese technology investor immediately turned bullish on taking it public.

SoftBank Group Corp. said Tuesday it plans an initial public offering of Arm after the intended sale to Nvidia failed due to regulatory problems. It said the IPO would come sometime in the fiscal year ending in March 2023.

Chief Executive Masayoshi Son acknowledged he was disappointed but wasted no time in shifting to an aggressive sales pitch for Arm in its preparing to go public in the U.S., likely on the Nasdaq exchange.

“Arm is back. Rather just being back, it’s really going to grow explosively,” Son told reporters.

He said “a golden time” was coming because of Arm’s “architecture,” or technology for semiconductors, already widely used in cell phones and adapted by net giants like Amazon. Son said even bigger growth will come as the world shifts to electric vehicles because Arm products are energy efficient.

Earlier faltering results at Arm were merely because of a hefty investment in hiring engineers needed to keep such innovations going, Son said.

Son said he was tapping new leadership to give Arm a fresh start, with Rene Haas, a semiconductor industry veteran, as chief executive, replacing Simon Segars.

“With the uncertainty of the past several months behind us, we are emboldened by a renewed energy to move into a growth strategy and change lives around the world again,” Haas said.

Arm, which SoftBank acquired in 2016, is a leader in artificial intelligence, IoT, cloud, the metaverse and autonomous driving, with sales and profit growing in recent years. Its semiconductor design is widely licensed and used in virtually all smartphones, the majority of tablets and digital TVs.

The company’s business centers on designing chips and licensing the intellectual property to customers, rather than chip manufacturing, for which it relies on partners.

Nvidia also confirmed the merger was no longer on, although it still had its 20-year licensing agreement with Arm.

“Arm is at the center of the important dynamics in computing. Though we won’t be one company, we will partner closely with Arm,” said Jensen Huang, founder and chief executive officer of Nvidia.

In December, the Federal Trade Commission sued to block Nvidia’s $40 billion acquisition of Arm, saying the deal would give one of the largest chip companies control over the computing technology and designs that rival firms rely on to develop their own competing chips.

The FTC said the combined firm could stifle innovative next-generation technologies, including those used to run datacenters and driver-assistance systems in cars.

The British government Competition and Markets Authority, which had been investigating whether the deal might hurt competition, said it was abandoning the probe. European Union regulators also had been investigating.

Geoff Blaber, chief executive at CCS Insight, said the opposition to the sale was not a surprise because many people wanted Arm to stay independent.

“It has also been disruptive to Arm and its ecosystem. An IPO is a far better option for the Arm ecosystem but is unlikely to provide Softbank a comparable return,” he said.

Besides Arm, SoftBank owns stakes in various technology companies including the SoftBank mobile carrier, Yahoo web services provider, Chinese e-commerce giant Alibaba and vehicle-for-hire company Didi. SoftBank also takes part in funds that include other global investors called Vision Funds, which focuses on artificial intelligence companies.

As a result, its financial results tend to be complex and varied. SoftBank has bought and then sold stakes in office-sharing venture WeWork, robotics company Boston Dynamics, mobility service provider Uber and mobile carrier Sprint, all American businesses.

SoftBank’s profit tumbled 98% in the quarter through December, as the value of its sprawling investments declined.

Net profit for the fiscal third quarter totaled 29 billion yen ($252 million), down from 1.17 trillion yen the previous year, the company said. Quarterly sales edged up to 1.6 trillion yen ($13.9 billion) from 1.5 trillion yen.

Son, who founded SoftBank, is one of the most famous rags-to-riches successes in Japan’s business world. He has repeatedly stressed that his decisions have proved sound in the long run. A graduate of the University of California Berkeley, he latched on to the potential of the internet decades ago.

___

Kelvin Chan in Beijing contributed.

Kelvin Chan is on Twitter https://twitter.com/chanman

Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Former President Donald Trump gestures as he departs Trump Tower, Wednesday, Aug. 10, 2022, in New ...
Associated Press

Trump arrives for testimony in New York investigation

WASHINGTON (AP) — Donald Trump was being questioned under oath Wednesday in the New York attorney general’s long-running civil investigation into his business dealings as a flurry of legal activity surrounds the former president. Trump’s testimony comes just days after FBI agents searched his Mar-a-Lago estate in Florida as part of an unrelated federal probe […]
7 hours ago
Associated Press

EU to stop Greek budget watch in formal end to major crisis

BRUSSELS (AP) — The European Union’s budget watchdog announced Wednesday that it is winding up years of surveillance of Greek government spending. The move marks a formal end to a major crisis that threatened to see Greece ejected from the euro single currency group, imposed severe hardship on its citizens and roiled global financial markets. […]
7 hours ago
Jada Riley sits in her car at night with her son Jayden Harris, 6, as she contemplates where she mi...
Associated Press

Evictions spiking as assistance, protections disappear

Jada Riley thought she had beaten homelessness. The 26-year-old New Orleans resident was finally making a steady income cleaning houses during the pandemic to afford a $700-a-month, one-bedroom apartment. But she lost nearly all her clients after Hurricane Ida hit last year. Then she was fired from a grocery store job in February after taking […]
7 hours ago
Associated Press

Lawyer: UAE overturns sentence for former Khashoggi attorney

DUBAI, United Arab Emirates (AP) — The United Arab Emirates on Wednesday overturned a three-year prison sentence for an American citizen who had represented slain Saudi journalist Jamal Khashoggi, one of his lawyers said, instead punishing him with a fine of $1.36 million and deportation. The U.S. citizen, Virginia-based lawyer Asim Ghafoor, had been convicted […]
7 hours ago
FILE -- Brothers of Italy's far-right party Giorgia Meloni attends a media event for center-right l...
Associated Press

Italy’s far-right Meloni on vote: I’m no danger to democracy

ROME (AP) — Italy’s far-right leader Giorgia Meloni, who is leading in opinion polls ahead of Sept. 25 parliamentary elections, insists she won’t be a danger to democracy if she becomes premier, contending that the Italian political right has “unambiguously” condemned the legacy of fascism. She also dismissed as “nonsense” concerns that if her Brothers […]
7 hours ago
Follow @ktar923...
Sponsored Content by Day & Night Air Conditioning, Heating and Plumbing

Here are 4 signs the HVAC unit needs to be replaced

PHOENIX — When you think about home investments, what’s the first thing that comes to mind? Was it the air conditioning unit? Pool renovations and kitchen upgrades may seem enticing, but at the forefront of these investments arguably should be what residents use the most. In a state where summertime is sweltering, access to a […]

Sponsored Articles

...
Mayo Clinic Orthopedics and Sports Medicine

Why your student-athlete’s physical should be conducted by a sports medicine specialist

Dr. Anastasi from Mayo Clinic Orthopedics and Sports Medicine in Tempe answers some of the most common questions.
...
Dr. Richard Carmona

Great news: Children under 5 can now get COVID-19 vaccine

After more than two years of battle with an invisible killer, we can now vaccinate the youngest among us against COVID-19. This is great news.
...
CANVAS ANNUITY

Best retirement savings rates hit 4.30%

Maximize your retirement savings with guaranteed fixed rates up to 4.30%. Did you know there is a financial product that can give you great interest rates as you build your retirement savings and provide you with a paycheck for life once you retire? It might sound too good to be true but it is not; this product is called an annuity.
Japan’s SoftBank drops sale of Arm, plans IPO