Ministers consider sale of chip designer Arm to Nvidia unlikely
MPs say Arm’s sale to Nvidia likely won’t go through and would welcome return to stock market
- Arm has struggled under the ownership of Japan’s Softbank
- Softbank wants to sell Arm to US chip giant Nvidia for £30 billion
- A IPO would mean that Softbank and Arm get investor support
Ministers believe the sale of British computer chip designer Arm to an American company is unlikely to go ahead and would welcome its return to the London stock market, Whitehall sources suggest.
Arm is one of the crown jewels of the UK tech sector, but struggled under ownership of Japan’s Softbank, which bought the company for £24 billion in 2016.
Softbank wants to sell Arm to US chip giant Nvidia for £30 billion, but the deal has met opposition and a series of investigations by regulatory authorities.
Opposition: Softbank wants to sell Arm to US chip giant Nvidia for £30bn
There are calls for the tech company to come back and list in London if regulators block the deal. A source in Whitehall said: ‘Many in the government think the deal is falling through and want the company to return to the London Stock Exchange.’ The sentiments were shared by leading business executives, including Rolls-Royce chief and former Arm boss Warren East. He said: ‘It’s good to see the support. Most importantly, British technology has an impact on the world.”
Sources close to the deal said Softbank chose to sell to Nvidia as the Japanese private equity giant believed it was the quickest way out of the company.
But it’s been more than a year since the deal was first announced and the acquisition is unlikely to close by the target date of March 2022.
Russ Shaw, founder of Tech London Advocates, said: “The 2016 sale only lasted about four months. But this time it’s different. IPOs are a lengthy process, which is why Softbank went for a trade sale. But with the UK, China, the EU and the US all potentially blocking the deal, an IPO may be the only way.”
If listed, Softbank and Arm would participate in a roadshow to gain support from institutional investors, but the company’s shares would be in high demand.
Shaw added: “We’re talking about one of the most beloved technology companies in the world. His customers like Apple and Google swear by it.’
Listed on the London stock market before being sold to Softbank, Arm was ‘the darling’ of the UK tech sector. Earlier this week, ministers ordered an investigation into Nvidia’s attack on competition and national security grounds. Concerns have also been raised in the US and the deal is under review in China.