SoftBank plans to take Arm public after Nvidia's takeover deal collapses

SoftBank's $66 billion sale of UK-based chip business Arm to Nvidia collapsed late on this Monday.

SoftBank will receive a break-up fee of up to $1.25 billion. In the meanwhile, the Japanese technology group is stepping up preparations for an Arm initial public offering as an alternative to the Nvidia takeover. It may seek an IPO of Arm before the end of its next fiscal year in March 2023.

The purchase was poised to become the biggest semiconductor deal in history when it was announced in September 2020. However, it has drawn a fierce backlash from regulators and the chip industry, including Arm’s own customers.

Regulators in the US, UK and EU raised serious concerns about its effects on competition in the global semiconductor industry.

The U.S. Federal Trade Commission sued to stop the transaction in December, arguing that Nvidia would become too powerful if it gained control over Arm’s chip designs.

Arm holding, headquartered in Cambridge, U.K., was independent until 2016, when SoftBank bought it for $32 billion.

Arm licenses its architecture and technology to hundreds of companies around the world that design chips for devices from mobile phones to computers.

Its customers includes Qualcomm Inc, Apple, Samsung Electronics Co Ltd, etc. Apple uses them in iPhones and iPads, Amazon uses them in Kindles, and car manufacturers use them in vehicles.

SoftBank said that Arm's net sales surged 40% to $2 billion in the nine months to December from the year-ago period.