Softbank subsidiary Arm to list in the US, quashing UK market hopes

Arm, a chip designer company that Japan’s SoftBank owns, announced that it would pursue a US listing this year. The designer company has quashed hopes from the United Kingdom government that it would resume operations in the London stock market.

Softbank subsidiary announces a US listing

The chip designer has not ruled out plans to eventually list its company in London. Arm has said it plans to have a subsequent initial public offering (IPO) in due course but has not provided any additional details about this IPO.

The decision made by the company is a major blow to London, given that the chip designer was listed in the market for 18 years before being acquired by SoftBank in 2016. The company closed this acquisition in a $32 billion deal that did not receive much attention from the UK government.

The move has resulted in criticism of the UK government that it had allowed one of the largest tech companies in the country to be acquired by foreign investors. The UK government has since been working hard to get the company to list on the London stock market.

The UK Prime Minister, Rishi Sunak, and the Chief Executive of Arm, Rene Hass, had a meeting in Downing Street last month. The founder of SoftBank, Masayoshi Son, reportedly attended this meeting through a video call.

The loss of Arm’s listing in London comes after CRH, a building materials company based in Dublin, decided to shift its primary listing from London to the United States. Arm is behind the processor technology that is integrated into almost every smartphone. The chip designer sells the intellectual property to leading tech giants like Apple and Qualcomm Inc.

Haas issued a statement saying after interacting with the UK government and the Financial Conduct Authority for several months, Arm and SoftBank have determined that pursuing a listing in the United States was the best move for the company and the stakeholders.

Arm still has operations in Europe

A spokesperson from the UK has also said that the country was engaging in ambitious reforms on the rules around its capital markets to support its ongoing success as a leading hub in Europe for investment and the second-largest global hub.

Arm was based in Cambridge, east England, and has another base in San Jose, California. It plans to sustain its headquarters and operations and obtain material IP in the UK. The company also plans to expand its British workforce and create a new site in Bristol, West England.

Arm wants to expand its operations beyond smartphones and focus on other areas, such as data center servers. The company’s sales increased by 28% in the recent quarter to $746 million, among the few growth areas for SoftBank.

The Japanese firm is also planning to list Arm after securing a deal to sell the chip designer to a rival firm known as Nvidia, which had a valuation of up to $80 billion. The deal collapsed amid anti-trust concerns in 2022.