Ministers believe sale of chip designer Arm to American firm is unlikely to go through and would welcome its return to London stock market
- Arm has struggled under the ownership of Japan’s Softbank
- Softbank is looking to sell Arm to US chip giant Nvidia for £30billion
- A stock market listing would involve Softbank and Arm gaining investor support
Ministers believe the sale of British computer chip designer Arm to an American firm is unlikely to go through and would welcome its return to the London stock market, Whitehall sources suggest.
Arm is one of the crown jewels of the UK technology sector but has struggled under the ownership of Japan’s Softbank which bought the company for £24billion in 2016.
Softbank is looking to sell Arm to US chip giant Nvidia for £30billion but the deal has faced opposition and a string of regulatory investigations.
Opposition: Softbank is looking to sell Arm to US chip giant Nvidia for £30billion
There are calls for the tech firm to come back and list in London should regulators block the deal. A Whitehall source said: ‘Many in government don’t think the deal will go through and want to see the company returned to the London Stock Exchange.’ The sentiments were echoed by leading businessmen, including Rolls-Royce chief and former Arm boss Warren East. He said: ‘It is good to see the support. The important thing is UK tech making an impact on the world.’
Sources close to the deal said Softbank chose a sale to Nvidia as the Japanese private equity giant considered it the quickest way to exit the business.
But it has been more than a year since the deal was first announced and it is unlikely the acquisition will close by the target date of March 2022.
Russ Shaw, founder of Tech London Advocates, said: ‘The sale in 2016 only took about four months. But this time around is different. IPOs are a lengthy process hence why Softbank went for a trade sale. But with the UK, China, the EU and the US all potentially blocking the deal, an IPO might be the only way.’
A stock market listing would involve Softbank and Arm engaging in a roadshow to drum up support from institutional investors, but there would be high demand for the company’s stock.
Shaw added: ‘We’re talking about one of the most loved tech companies in the world. Its customers like Apple and Google swear by it.’
Arm was listed on the London stock market before being sold to Softbank and was ‘the darling’ of the British tech sector. Earlier this week ministers ordered an investigation into Nvidia’s swoop on competition and national security grounds. Concerns have also been raised in the US and the deal is ‘under review’ in China.