SoftBank hires Goldman Sachs to explore sale options for chip designer Arm after getting inbound interest, sources say

SoftBank has hired Goldman Sachs to explore both an initial public offering and a sale of U.K. chip designer Arm Holdings, according to people familiar with the matter.

SoftBank has been preparing to spin out Arm in an IPO but has recently begun exploring sale options after receiving interest from an outside party, said two people, who asked not to be named because the discussions are private. It’s unclear if the outside company or entity is interested in buying all or just part of Arm, which was acquired by SoftBank for about $32 billion four years ago.

The Wall Street Journal first reported SoftBank had hired Goldman to gauge sale interest. Spokespeople at SoftBank and Goldman Sachs declined to comment. 

SoftBank is looking for more cash to help support companies in its $100 billion Vision Fund, many of which have struggled since the pandemic and quarantines started. SoftBank agreed to sell about $21 billion of its stake in T-Mobile after merging Sprint with the third largest U.S. wireless company last year. The Japanese technology holding company has said it plans to sell up to $41 billion in assets. SoftBank is also buying back billions of shares, which has helped boost its stock in recent months. 

SoftBank bought Arm as an investment in the so-called Internet of Things — the idea that wireless connectivity among everyday items such as refrigerators, cars and other devices would lead to useful new scenarios. Arm said last week it planned to transfer its IoT divisions to SoftBank. The announcement was made to focus the company on an initial public offering more than a year from now, one of the people said. 

Few companies could afford to buy all of Arm without intense regulatory scrutiny. Arm has found a niche as a neutral designer of the microprocessors that works with many of the largest equipment manufacturers, including the majority of the world’s smartphones. Apple, Samsung and Qualcomm all use Arm technology in various ways. 

There have been few large semiconductor deals in recent years after a flurry of consolidation from 2014 to 2016. Part of the slowdown in recent years is related to CFIUS (The Committee on Foreign Investment in the United States) concerns about sharing technology with Chinese companies. Still, Analog Devices announced it planned to acquire Maxim Integrated Products for about $21 billion on Monday — a deal that could bring activity back to the market.

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