ARM Likely To File For Public Listing In US

Disappointment for London Stock Exchange, as ARM owner Softbank indicates it will file for public listing in the United States

ARM Holdings will likely be publicly listed on NASDAQ in the United States, the head of owner Japan’s Softbank has indicated.

Earlier this week the $40bn sale of ARM Holdings to GPU powerhouse Nvidia was called off, due to “significant regulatory challenges”. The cancellation has been viewed with relief by many within the tech industry.

ARM made an immediate CEO change, after former boss, Simon Segars, had strongly defended the Nvidia purchase, and said it was the best outcome for the British chip designer, and was a better solution than an IPO.

ARM CEO Rene Haas

US listing

Owner Softbank however indicated it will now proceed with an initial public offering (IPO), despite calls from some experts for the UK government to gain ownership of the world’s most important chip designer.

The UK after all was considering blocking ARM’s sale to Nvidia on national security grounds, despite Nvidia being an American firm.

ARM is currently owned by Japanese firm SoftBank, after it had acquired ARM for $32bn in 2016.

It is no secret the UK government wants British companies to list on its home market, in order to benefit the UK’s economy and bolster the London Stock Exchange.

ARM is widely considered the crown jewel of the UK’s tech industry, so the comments of Softbank’s CEO will disappoint government ministers, especially considering how the worldwide semiconductor shortage is focusing government attention around the world on where strategically important chips are designed and manufactured.

“The U.S. … that’s the market that we are looking at when it comes to listing ARM, and most likely Nasdaq,” Masayoshi Son, the CEO of SoftBank was quoted by CNBC as saying, in a press briefing Tuesday. “But wherever it is, the US is the market that we’re looking at for the listing of ARM.”

“We are excited to go to plan B,” Son reportedly said Tuesday. He added that plan B is to have a “big IPO” that will be one of the largest ever in the semiconductor sector.

It should be remembered that ARM was actually dual-listed in London and New York until 2016, when SoftBank acquired it – an acquisition the UK government at the time welcomed, despite concern five years ago at ARM falling into the hands of a foreign entity.

ARM was formed in 1990 when it was spun out of Acorn Computers and its chip designs are used in 95 percent of smartphones in use today because of their low power consumption. Rather than manufacture processors, it licenses designs to other companies like Qualcomm and MediaTek.

The UK government of course wants its biggest and best tech companies to list on home soil, but there is little doubt that a US listing is more attractive, as firms tend to achieve higher valuations on the NASDAQ or the New York Stock Exchange compared to other exchanges.

UK ownership?

The sentiment of many within the UK was echoed in comments earlier this week, made by Russ Shaw CBE, the founder of Tech London Advocates and Global Tech Advocates, when the collapse of Nvidia’s acquisition was revealed.

“With the threat of major regulatory obstacles and multiple government investigations, the collapse of Nvidia’s proposed takeover of ARM seemed all but inevitable and comes as little surprise,” noted Shaw earlier this week.

“Now that the deal is officially off, it is vital the UK focuses on maintaining ownership of one of our most precious and influential tech assets.”

“With the global chip shortage crisis showing little sign of easing – affecting all industries and impacting our everyday lives – businesses like ARM have a crucial role to play in sustaining the UK’s position as a leading player on the international tech and economic stages,” said Shaw.

“We simply must protect our digital sovereignty by maintaining ownership of ARM – a jewel in the crown of our semiconductor industry.”

“If Softbank’s aim is now to float ARM’s shares on the stock market by next year, then it is essential that it happens in the UK – and the London Stock Exchange becomes ARM’s new home,” Shaw concluded.