SoftBank Plans To Sell 25% of ARM Holdings To Vision Fund

Subject: General Tech, Processors | March 11, 2017 - 10:02 PM |
Tagged: softbank, investments, business, arm

Japanese telecom powerhouse SoftBank, which recently purchased ARM Holdings for $32 billion USD is reportedly in talks to sell off a 25% stake in its new subsidiary to a new investment fund. Specifically, the New York Times cites a source inside SoftBank familiar with the matter who revealed that SoftBank is in talks with the Vision Fund to purchase a stake in ARM Holdings worth approximately $8 billion USD.

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The $100 billion Vision Fund is an investment fund started by SoftBank founder Masayoshi Son with a goal of investing in high growth technology start-ups and major technology IP holders. The fund is currently comprised of investments from SoftBank worth $25 billion, $45 billion from Saudi Arabia (via Saudi Arabia Public Investment Fund), and minor investments from Apple and Oracle co-founder Lawrence Ellison. The fund is approximately 75% of the way to its $100 billion funding goal with the state owned Mubadala Development investment company in Abu Dhabi and the Qatari government allegedly interested in joining the fund. The Vision Fund is based in the UK and led by SoftBank's Head of Strategic Finance Rajeev Mistra (Investment bankers Nizar al-Bassam and Dalin Ariburnu formerly of Deutsche Bank and Goldman Sachs respectively are also involved.)

It is interesting that SoftBank plans to sell off such a large stake in ARM Holdings so soon after purchasing the company (the sale finalized only six months ago), but it may be a move to entice investors to the investment fund which SoftBank is a part of to further diversify its assets. The more interesting question is the political and regulatory reaction to this news and what it will mean for ARM and its IP to have even more countries controlling it and its direction(s). I do not have the geopolitical acumen to speculate on whether this is a good or bad thing (heh). It does continue the trend of countries outside of the US increasing their investments in established technology companies with lots of IP (wether US based or not) as well as new start ups. New money entering this sector is likely overall good though, at least for the companies involved heh.

I guess we will just have to wait and see if the sale completes and where ARM goes from there! What are your thoughts on the SoftBank sale of a quarter stake in ARM?


March 12, 2017 | 03:14 AM - Posted by Anonymous (not verified)

I don't see that Arm Holdings has ever been a US company Arm Holdings was UK company and Softbank is:

"Japanese multinational telecommunications and Internet corporation established on September 3, 1981, and headquartered in Tokyo, Japan. It has operations in broadband, fixed-line telecommunications, e-commerce, Internet, technology services, finance, media and marketing, semiconductor design, and other businesses.[6] The company is headed by founder Masayoshi Son.

SoftBank was ranked in the Forbes Global 2000 list as the 62nd largest public company in the world,[7] and the third largest public company in Japan after Toyota and Mitsubishi UFJ Financial.[8] Between 2009 and 2014, SoftBank's market capitalization increased by 557%, the fourth largest relative increase in the world over that period.[9]" (1)

So Softbank creates an investment fund investing some of its own money and a sales 25% intrest in Arm Holdings to that very investemnt fund that Softbank and other investors(goal 100 billion) are creating and will own. Looks like softbank is shifting assets around and rasing investment capital.

It's not really a sale it's more of an investment fund and Softbank is just creating a capital fund in the process, a nice way to spread the financial risk around for Softbank/fund investors that want to make income. That Oil money has to be invested somewhere it can't just sit in the bank, and regular lending is not going to produce enough money to stay far enough ahead of infaltion. So 25% of ARM holdings is controlled by an investment fund that Softbank has a 25% stake in with 75% going to any other intrested investors. Softbank sells an 8 billion dollar stake in ARM holdings to itself and its investment buddies is what the headline should read.

(1)

"SoftBank Group"

https://en.wikipedia.org/wiki/SoftBank_Group

March 12, 2017 | 06:04 AM - Posted by Martin Trautvetter

"Looks like softbank is shifting assets around and rasing investment capital."

/\ Exactly.

March 12, 2017 | 11:30 AM - Posted by willmore

Who said they were?

March 12, 2017 | 03:08 PM - Posted by Anonymous (not verified)

Foreign investments flow to where the money is being made or where the equity is being accrued! Who would have thunk it! It's been that way for decades and decades!

What makes Techology Companies so special in the overall scheme of things!

Get OFF of you A$$ ARM Holdings an get some wider order superscalar ARM Holding's refrence designs to market, with SMT ability! Just look at the F-ing Power8 and Power9 designs, ARM Holdings! Now that some RISC ISA running monsters!

And what's up with some News on AMD's custom K12 ARMv8A ISA running project! That's another Jim Keller managed joint development project along with the Zen x86 ISA running one!
Zen and K12 are supposed to be sharing the same CPU/Cache/other systems sorts of DNA!

March 12, 2017 | 11:48 PM - Posted by Tim Verry

I have not heard any news from AMD on K12 in forever :-/.

March 13, 2017 | 10:14 AM - Posted by Anonymous (not verified)

It would be a darn shame if it gets canceled as that's another Keller lead project id like to see the performance results on.

Softbank is growing like mad and who knows who will get acquired next but I hope that they still have the good sense to always keep a hands off approach to ARM Holding's business model, but rhere is always RISC-V ISA as an option if somethinkg changes for the worse at ARM Holdings.

Nvidia appaears to be making use of the RISC-V ISA on some internal product controller IP(Falcon).

March 12, 2017 | 11:54 AM - Posted by Tim Verry

Oh I guess i never said it was in the article (i did link to sebastian's article on the sale) but I know ARM is a UK company, I was just referring to in that last part the news over the last couple of years and recently of other companies being bought up by foreign invsstors (mainly China) heh. Sorry about that.

March 12, 2017 | 02:19 PM - Posted by Anonymous (not verified)

Foreign investors can by up corporate stocks and bonds individually or though investment funds and the capital markets are worldwide. Many of those same middle eastern investment funds make investments in other investment funds set up by big interests like SoftBank and SoftBank is supposed to have a mostly hands off with respect to the running of its ARM Holdings’ acquisition.

So SoftBank is supposed to be brokering some deals to get more capital investment resources and hopefully allow ARM Holdings to get some better reference designs to get more licensing revenues(CPU, GPU) and CPU/SOC systems integration business revenues from those companies that are not big enough to design CPU/SOC on their own. And Uncle Bob’s retirement funds are invested across these markets also, so money flows to where the profits or equity accruement have the greatest potential or even the better long term stability from market swings.

The Japanese are going to be building a exascale grade supercomputer using ARM holdings IP and a custom Fujitsu ARMv8A running design that is engineered to run the ARMv8A ISA and use the new ARM scalable vector extensions(SVE). The SVE is scalable from 128-bits to 2048-bits in 128-bit increments and should enhance ARM’s ability to exploit fine grain parallelism on its CPU designs. It looks like SoftBank is branching out into the Private Equity business also that Masayoshi Son guy has got his hand in a lot of investments outside of the usual SostBank software/telecom business that the company was founded on:

(1)

“SoftBank of Japan Will Buy U.S. Private Equity Giant Fortress”

https://www.nytimes.com/2017/02/14/business/dealbook/softbank-japan-fort...

March 12, 2017 | 11:47 PM - Posted by Tim Verry

Interesting, thanks for the link!

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