SoftBank Most Likely To Choose Goldman Sachs To Lead Arm IPO

All signs point to SoftBank’s choosing Goldman Sachs as the lead underwriter on its initial public offering of Arm Ltd. The IPO could value the British chip designer at as much as $60 billion, according to three people with knowledge of the matter.

The IPO comes in the wake of SoftBank’s failure last month to sell Arm to Nvidia for $40 billion due to objections from both U.S. and European antitrust regulators. SoftBank announced it would sell Arm to Nvidia in 2020, but the U.S. Federal Trade Commission sued to block it late in 2021, arguing it would be detrimental to competition in bourgeoning chip markets for self-driving cars and networking chips.

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SoftBank says now it will likely list Arm on Nasdaq by March 2023.

"We will aim for the biggest IPO ever in semiconductor history," SoftBank founder Masayoshi Son told investors last month. While SoftBank is likely to list Arm in the U.S., it has yet to select a venue.

In interviews last week with investment banks for Arm’s IPO, SoftBank asked them to commit to providing a line of credit as part of the deal, the sources said. It is unclear how much Goldman Sachs offered SoftBank for a credit line.

Arm licenses its technology and architecture to customers such as Qualcomm, Apple, and Samsung, which design chips for devices from computers to mobile phones. Arm’s technology powers nearly all smartphones, including Apple’s iPhone. In 2016, SoftBank took Arm private for $32 billion.

In the nine months prior to December 2021, amid a high demand for chips, Arm's net sales were up 40% to $2 billion, according to SoftBank. Even though this is good for the IPO, in the near term it may not even make up for the losses incurred in the Nvidia deal. At one point, under SoftBank and Nvidia’s cash-and-stock merger agreement, a rally in Nvidia shares had resulted in Arm’s being worth more than $80 billion. Despite this setback, if Arm and Founder Masayoshi Son get their wish, they could still be the biggest IPO in semiconductor history.