SoftBank Group Corp (9984.T) has purchased the 25% interest in Arm Ltd it does not directly control through its Vision Fund business in a deal that values the chip manufacturer at $64 billion, according to individuals familiar with the situation.
Details of the transaction will be revealed on Monday when Arm files for its blockbuster stock market debut, according to sources who asked to remain anonymous because the discussions are private.
Now SoftBank is expected to trade fewer Arm shares in the initial public offering (IPO) and would likely be retaining a stake of as much as 90% in the company, according to the sources. It is adding that Arm’s capital raising from the IPO would be less than the range of $8 billion to $10 billion
SoftBank is currently engaging in discussions to list Arm on the stock exchange with an anticipated valuation ranging between $60 billion and $70 billion during its IPO scheduled for September, according to previous reports by Reuters. In 2016, SoftBank took Arm private through a $32 billion acquisition, and subsequently, in 2017, it divested a 25% share of the company to Vision Fund 1 (VF1) for $8 billion.
This arrangement eliminates a potential complication for Arm’s post-IPO stock performance. Initially, VF1 had intentions to gradually liquidate its stake in the stock market after the listing. Conversely, SoftBank has communicated its intention to maintain a durable, strategic investment stance over the long term.
In early August, Reuters was the first to disclose SoftBank’s negotiations to acquire the stake held by the Vision Fund. Subsequently, The Wall Street Journal released the financial specifics of this transaction on the preceding Friday.
