• The Financial District


SoftBank Group Corp. said Monday it will sell its entire stake in British chip designer Arm Ltd. to U.S. semiconductor maker Nvidia Corp. for up to $40 billion, in a deal seen as an attempt to recover from recent investment losses.

Kyodo News said the sale is expected to be completed by around March 2022 after regulatory approval, SoftBank said, adding that the technology conglomerate, along with its tech-focused investment fund, will gain a stake of up to 8.1 percent in Nvidia through the cash-and-stock deal.

Nvidia will pay SoftBank $12 billion in cash and a total of $21.5 billion in common stock, the companies said in a joint statement. The Japanese firm may also receive up to $5 billion in cash or common stock when Arm meets financial performance targets specified in the agreement.

The U.S. firm will also issue $1.5 billion in equity to Arm employees, according to the statement.

"Joining forces with a world leader in technology innovation creates new and exciting opportunities for Arm," SoftBank Chairman and CEO Masayoshi Son said in the statement, calling Nvidia "the perfect partner" for the British chip designer.

SoftBank acquired Arm in 2016 for $31 billion, in a bet on the potential of the internet of things, a concept in which everything from household devices to cars is connected to the internet. Arm is currently 75 percent owned by SoftBank, with the remaining 25 percent held by its Vision Fund.

But SoftBank has apparently struggled to accelerate growth at Cambridge-based Arm, whose chips are used in a variety of products including smartphones.

Nvidia, headquartered in California, has strength in graphics-processing units for computer gaming and is now focusing on artificial intelligence.

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