SoftBank Group Corp (OTC: SFTBF) (OTC: SFTBY) is weighing the acquisition of the remaining 25% stake in British chip designer Arm Ltd from Vision Fund 1 (VF1), its $100 billion investment fund raised in 2017.
This potential deal could provide VF1 investors, like Saudi Arabia's Public Investment Fund and Abu Dhabi's Mubadala alleviating their past losses from investments like WeWork Inc (NYSE: WE) and DiDi Global Inc (OTC: DIDIY), Reuters reports.
Selling VF1's Arm shares on the stock market post-IPO could take one to two years, making a deal with SoftBank a quicker option.
SoftBank owns 75% of Arm and plans to list the chip designer on Nasdaq in September with a valuation of $60 billion - $70 billion.
SoftBank's interest in this deal aligns with its recent push to shift to artificial intelligence advancements.
SoftBank's founder, Masayoshi Son, tapped investment bank Raine Group to guide the negotiations and has recused himself from VF1's discussions to ensure an impartial decision.
If successful, SoftBank could reduce the number of Arm shares sold in the IPO, retaining 85% - 90% ownership.
SoftBank also explored partnerships with tech companies like Amazon.Com, Inc (NASDAQ: AMZN) as cornerstone investors in Arm's IPO.
Arm prepared for a single U.S. public listing, dumping calls from the U.K. government for dual listing in its home market.
Valuation declines in holdings like Alibaba Group Holding Limited (NYSE: BABA) and T-Mobile US, Inc
(NASDAQ: TMUS) weighed on SoftBank's recent financial performance.
Price Action: SFTBF shares closed lower by 0.79% at $46.50 on Friday.