Whitehall sources say that ministers are skeptical about the sale of Arm, a British chip manufacturer, to an American company and would like to see the firm return to London.
Arm is one of the crown jewels of the UK technology sector but has struggled under the ownership of Japan’s Softbank which bought the company for £24billion in 2016.
Softbank is looking to sell Arm to US chip giant Nvidia for £30billion but the deal has faced opposition and a string of regulatory investigations.
Opposition: Softbank is looking to sell Arm to US chip giant Nvidia for £30billion
Should regulators reject the deal, the company could be asked to return and list in London. A Whitehall source said: ‘Many in government don’t think the deal will go through and want to see the company returned to the London Stock Exchange.’ Warren East (Rolls-Royce Chief Executive Officer and ex-Arm boss) echoed the sentiments. He added, “It is great to see the support.” It is important that UK technology has an impact in the world.
According to sources close to the transaction, Softbank sold Nvidia because the Japanese private equity firm considered it to be the fastest way out of the company.
However, it has been over one year since the announcement of the deal and the closing date for March 2022 is not likely.
Russ Shaw is the founder of Tech London Advocates. He said that it took only four months to sell Tech London Advocates in 2016. However, this year is different. IPOs are a lengthy process hence why Softbank went for a trade sale. However, with all the potential obstacles to the US, UK, China, EU, and EU blocking any deal, an IPO could be the best option.
Softbank would organize a tour to attract institutional investors for stock market listings. But, the stock would still be in high demand.
Shaw said, “We are talking about the best tech company in the world.” Customers like Google and Apple swear by the product.
Arm was listed at the London Stock Exchange before being bought by Softbank. It was the darling of British tech industry. Ministers have ordered an investigation of Nvidia’s move on national security, competition, and other grounds. The deal has been reopened in China, although concerns have already been expressed in the USA.