Amazon is looking to anchor the IPO and has joined Nvidia, Apple, Intel, TSMC, and Samsung in official talks with Arm Ltd.
American multinational e-commerce giant Amazon is reportedly trying to anchor the upcoming initial public offering (IPO) of SoftBank Group Corp’s chip designer Arm Ltd. According to a Reuters report, people familiar with the matter have confirmed Amazon’s intention even though neither company has officially released a statement.
Arm is currently talking with several major tech companies as it prepares for the IPO. In addition to Amazon, Arm is in talks with Apple, TSMC, Samsung Electronics Co Ltd, Alphabet Inc, and Intel Corp. However, while engagements are ongoing, the source said the discussions are preliminary. In addition, the investment would not give any anchor investor any control or board seat. The source also noted that Arm will likely not make any related decision until August.
Last year, Nvidia confirmed its intention to buy Arm Holdings for up to $40 billion from current owner SoftBank. The company’s confirmation ended weeks of speculation about a possible acquisition and was set to give Nvidia more power in the semiconductor industry. SoftBank was to get $2 billion in cash, $21.5 billion worth of Nvidia stock, and $1.5 billion in equity compensation for Arm staff. However, the potential deal eventually collapsed following regulator concerns from the UK, EU, and US. Regulators worried that the deal would create too much monopoly in the industry.
Forthcoming Arm IPO with Amazon, Nvidia, and Others
Arm was dual-listed in New York and London before SoftBank acquired the chipmaker for $32 billion. Last year, British Prime Minister Rishi Sunak tried to reopen discussions about a London listing. Reportedly, Arm CEO Rene Haas met with Sunak at the Prime Minister’s official residence to discuss a possible IPO. The meeting, which had SoftBank founder Masayoshi Son in virtual attendance, reportedly ended positively. However, SoftBank decided to go with a US-Only IPO, abandoning plans for a London listing. In a statement, Haas said the US-only option “is the best way forward for the company and its stakeholders.”
Arm is seeking an IPO valuation of up to $70 billion. The listing, expected in September, could become the biggest IPO of 2023. It could also be the tech industry’s largest since Meta Platforms (NASDAQ: META) in 2012 and Alibaba Group in 2014. Arm’s official filing names multiple US financial services companies, including Barclays, Goldman Sachs, Mizuho Financial Group, and JPMorgan Chase.
At the initial IPO announcement, bankers had estimated that Arm would be worth between $30 billion and $70 billion at the IPO. However, CEO Haas disagreed with the lower end. According to him, the low point was not an accurate representation of the company’s value.
Arm’s IPO could significantly benefit SoftBank following the loss announced for the quarter ended June. The company announced a surprising net loss of 477.6 billion yen ($3.3 billion), far from the 75 billion yen profit analysts expected. Nonetheless, it was a better performance than the 3.16 trillion yen loss SoftBank recorded for the same period in 2022.