Tech Giants Apple, Nvidia, Alphabet, and AMD to Invest in Arm Holdings IPO
September 1, 2023
New York – In a major development, several leading tech companies, including Apple Inc, Nvidia Corp, Alphabet Inc, and Advanced Micro Devices Inc, have reportedly agreed to invest in the initial public offering (IPO) of Arm Holdings Ltd. This news comes from sources familiar with the matter.
In addition to these companies, Intel Corp, Samsung Electronics Co Ltd, Cadence Design Systems Inc, and Synopsys Inc have also shown interest in participating as investors in the IPO. The discussions are ongoing, and there are indications that other potential investors are also in talks to invest in Arm’s IPO.
According to earlier reports, SoftBank Group Corp, which owns Arm, is targeting a valuation between $50 billion and $55 billion. The sources suggest that Arm’s clients have agreed to invest in this valuation range. However, it is possible that the demand for Arm’s shares may lead to a higher valuation by the time the IPO prices.
This investment marks a shift from SoftBank’s previous valuation of Arm. Last month, SoftBank acquired a 25% stake in the company for $64 billion, valuing the entire company at $100 billion.
Reports indicate that Apple, Nvidia, and other strategic investors would invest between $25 million and $100 million each in the IPO. Arm and SoftBank have already set aside 10% of the shares to be sold in the IPO for its clients.
However, there is news that Amazon.com Inc, which previously held talks to invest in the IPO, has decided not to participate. The discussions surrounding the IPO are confidential.
Arm’s IPO has led to a scramble among its clients, which include some of the world’s biggest technology companies. This rush to invest is driven by a desire to expand commercial relationships with Arm and ensure that competitors do not gain an advantage.
While an investment in the IPO does not come with a seat on Arm’s board or the ability to dictate strategy, it could strengthen ties with participating companies and make it more challenging for a competitor to acquire Arm in the future.
Both Arm and SoftBank have not immediately responded to requests for comment. Other companies, including AMD, Intel, Synopsys, Nvidia, Alphabet, Amazon, Apple, Samsung, and Cadence, have also refrained from commenting on the matter.
The Wall Street Journal first reported Arm’s estimated valuation target earlier on Friday.
Reporting by Echo Wang; Editing by Anirban Sen and Rosalba O’Brien
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About the Author:
Echo Wang is a correspondent at Reuters covering U.S. equity capital markets and the intersection of Chinese business in the U.S. She has reported on various breaking news, from the U.S. crackdown on TikTok and Grindr to the restrictions Chinese companies face in listing in New York. Wang was awarded Reuters’ Reporter of the Year in 2020.
Contact: +9172873971
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Source: Reuters