SoftBank’s Arm rebuffs London by choosing U.S. listing

Paul Sandle

LONDON (Reuters] – Arm, a chip design company that is partly owned by SoftBank Japan, announced Friday that it will seek a U.S. listing in the coming year. The British government had hoped that the tech giant would bring back the London stock exchange.

The company stated that although it didn’t rule out a London listing it would be open to an IPO.

This is a setback for London, where Arm had been listed for 18 years before it was acquired by SoftBank. The government did not examine the $32 billion deal. This led to criticisms of the government’s decision to sell Britain’s most successful tech company to foreign investors.

According to reports London worked hard to secure the listing. Rene Haas, Chief Executive of Arm, and Prime Minister Rishi Singhak met last month in Downing Street. Masayoshi Son, founder of SoftBank, claimed that he joined the meeting via video conference.

This loss follows CRH’s decision on Thursday by the Dublin-based building materials giant to move its primary listing from London to the United States.

Arm is the creator of almost all smartphones’ processor technology. It also sells intellectual properties to companies like Apple Inc. or Qualcomm Inc.

Haas stated in a statement, SoftBank and Arm had engaged over many months with the British government and the Financial Conduct Authority. “Striving for a U.S.-only Arm listing in 2023 is the best way forward for the company’s stakeholders,” Haas also added.

A spokesperson for the British government stated the UK was committed to ambitious reforms in its capital markets rules. This is in addition the fact that we are Europe’s biggest investment hub and second largest country globally.

Arm was founded in Cambridge, East England. It also maintains a San Jose base in California. Arm stated that it would keep its headquarters, operations, material IP, and other assets in Britain.

According to the company’s statement, it will expand its British workforce and create a new location in Bristol (West England).

Arm has launched data center servers to expand its reach beyond smartphones. These servers can be reduced in energy consumption and are low-power. Arm is SoftBank’s only growth area, with sales increasing 28% to $746M in the most recent quarter.

The Japanese conglomerate, after a failed deal to purchase Nvidia’s chip design engineer Arm was listed.

New York was immediately identified as the preferred destination. The company will join Nvidia and Qualcomm in New York.

(Reporting by Jose Joseph In Bengaluru, Kanjyik In London, and Paul Sandle Throughout London; Editing done By Sherry Phillips, William Schomberg and Jan Harvey