SoftBank Is Said to Be Selling a 25% Stake in ARM Holdings

In Photo: The logo of Japanese mobile provider SoftBank is displayed at an entrance of a shop in Tokyo’s shopping district Ginza on February 8, 2017.

By Mark Scott

When SoftBank, the Japanese telecommunications giant, bought the British semiconductor designer ARM Holdings last year for $32 billion, Masayoshi Son, SoftBank’s founder, said the deal would bring benefits like jobs and investment to Britain.

Now, just six months later, SoftBank is in final-stage talks to sell a 25-percent stake in ARM, according to a person with direct knowledge of the matter who was not authorized to speak publicly.

The roughly $8 billion sale will be to a new $100-billion investment fund that Son has created with Saudi Arabia and other investors, raising questions about how politicians in Britain, the United States and elsewhere will respond to such investments in their national technology industries. Chips made by ARM power iPhones and millions of other mobile devices worldwide.

Son met with President Donald Trump before his inauguration in January about using the $100-billion fund to buy stakes in US tech companies, with the aim of creating thousands of jobs.

While British lawmakers remain sanguine about the proposed sale of ARM to Son’s investment vehicle, known as Vision Fund, it remains unclear whether US politicians will be as willing for the fund to scoop up stakes in US tech companies.

Representatives for ARM and SoftBank declined to comment. The proposed sale of the ARM stake, which has yet to be completed, was reported earlier by The Financial Times.

The move by SoftBank, which also owns Sprint in the United States, comes as it tries to secure further investment to reach the financial goal for Vision Fund. The investment vehicle will be based in London and run by Rajeev Misra, SoftBank’s head of strategic finance.

Saudi Arabia’s Public Investment Fund has pledged to invest $45 billion in the fund, while SoftBank has contributed $25 billion. Apple, the iPhone maker, and Lawrence Ellison, a co-founder of Oracle, also have invested in Vision Fund. Mubadala Development, a state-owned investment company in Abu Dhabi, and the Qatari government are in talks to join the fund.

The goal of Vision Fund, according to Son, is to invest in high-growth tech startups, although the fund also will spend on larger tech investments in the public and private markets.

While the Vision Fund tries to reach its financial goals, SoftBank has already moved to spend its own cash on potentially lucrative deals. That includes recently buying Fortress Investment Group, the U.S. private equity giant, for $3.3 billion, and having invested $1 billion late last year in OneWeb, a company providing internet connectivity through satellites.

 

© 2017 New York Times News Service

Image Credits: Kazuhiro Nogi/Agence France-Presse/Getty Images