Softbank in talks to buy Vision Fund’s stake in chip designer Arm

SoftBank is reportedly in talks to buy the remaining 25% stake in Arm from Vision Fund 1, a $100 million fund it raised back in 2017, reports Reuters citing people familiar with the matter.

The sources tell that the investment company wants to win over the investors who have been waiting for the fund to turn a profit for a while now.
If negotiations succeed, the Japanese investment bank will deliver an immediate windfall to VF1 investors, including Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala, who suffered losses from SoftBank’s failed bets on startups like WeWork and Didi Global. The safer option for VF1 is to gradually sell its Arm shares in the stock market after the initial public offering (IPO), which could take up to two years due to the size of the stake.

The chip designer aims to go public in September with a valuation of $60-70 billion. Amazon, Intel, and Nvidia have discussed becoming anchor investors, Bloomberg reported.
SoftBank acquired Arm for $32 billion in 2016 before selling a 25% stake to VF1 for $8 billion in 2017. SoftBank has been in talks with various technology companies to onboard them as cornerstone investors in Arm before its IPO, including Amazon, Apple, and Intel.
In response to the failed $40 billion acquisition of Arm by Nvidia due to opposition from U.S. and European antitrust regulators, SoftBank is preparing for an initial public offering (IPO) of Arm. The company is considering a listing worth up to $10 billion.
Earlier this year, Arm declined the British government’s proposal to list its shares in London and instead opted for a flotation on a U.S. exchange. Unlike the broader chip industry, Arm’s business focuses on licensing designs rather than manufacturing processing systems itself.
While the chip designs have been yielding Arm substantial royalty earnings, a dip in smartphone demand has recently impacted Arm’s profits.