Japan’s SoftBank is to sell 25% of UK-founded smartphone chip designer Arm to a $100bn Saudi-backed investment fund.
The 25% stake is worth roughly $8bn, and will be purchased by SoftBank’s Vision Fund, now funded by Mubadala, a state-backed Abu Dhabi investment group, the Financial Times reports
Mubadala looks to be committing $15bn to the Vision Fund and sources close to the negotiations claim Mubadala wants the fund to own a portion of Arm.
“We’re having ongoing, fruitful discussions over our participation in the fund… Arm is certainly a strong technology company with great, continued potential. The Abu Dhabi group has been focused on growing its technology investments over the past decade, including in the semiconductor sector,” a Mubadala spokesperson said.
SoftBank Vision Fund is aiming to secure a $100bn target. Last year, Saudi Arabia’s Public Investment Fund said it would contribute up to $45bn. Others planning to invest in the fund include Apple, Qualcomm and Oracle Founder Larry Ellison.
Masayoshi Son, founder and CEO of SoftBank, grew the company into a global internet and telecoms powerhouse and is aiming to amalgamate international capital to pursue further investments on behalf of his company.
SoftBank signed the deal to buy Arm for $32.4bn in July 2016, just weeks after Britain voted to leave the EU. The purchase of the chip designer was seen to fulfil Son’s desire to break into the Internet of Things and connected devices market.
In the post-Brexit climate, concerns were raised about ‘selling the crown jewels’ of the British tech sector to a foreign investor. Arm’s founder, Hermann Hauser, described the deal as one of the “sad and unintended consequences” of leaving the EU.
Downing Street however, said the deal was a “vote of confidence” in Britain. As part of the acquisition, SoftBank pledged to double Arm’s UK-based workforce by 2020 and keep its headquarters in the UK, to signify its commitment to Britain.
The new deal is likely to invite further critique as Son is seen to be giving more of Arm away to a diverse array foreign investors as he forges his status as a global dealmaker.