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Softbank CEO Masayoshi Son is happy about the 40 billion dollar deal
Photo: KAZUHIRO NOGI / AFP
Softbank boss
Masayoshi Son
(63) sells his biggest tech investment in his lack of money: The chip designer Arm, a key company for the entire smartphone industry, is to come into the hands of the graphics card specialist Nvidia.
The previous owner, the Japanese technology group Softbank, is separating from the British company in a deal worth around 40 billion dollars, the companies announced on Monday night.
However, the takeover still requires approval from competition watchdogs in the US, the European Union, China and the UK - and given the importance of arm, there could be resistance.
The companies allow a period of 18 months for this.
There has been speculation about the deal since July, the last time the Wall Street Journal reported on Saturday about a possible sale, citing insiders.
The basic architecture of the chips, which are used in practically all smartphones and the vast majority of tablet computers, comes from Arm.
Based on the arm designs, Apple and Samsung, among others, develop the processors for their smartphones.
The chip company Qualcomm, whose processors are in many Android phones, also uses it.
Arm itself does not manufacture its own computer chips, but only issues the licenses for the technology behind them.
The arm architectures prevailed in smartphones against chip systems from the semiconductor giant Intel - among other things because they work significantly more energy-efficiently.
Now the technology is about to jump into the PC market: Apple is converting its Mac computers to Arm technology, and a first model is expected this year.
In 2019, Arm delivered a total of 22.8 billion units; its market share for mobile processors was 90 percent, according to its own information, and 75 percent for infotainment and driver assistance systems in cars.
With license fees from chip manufacturers who use arm technology, as well as other bonuses, the company, which was founded in 1990, turned over almost 1.6 billion dollars last year.
The chief executive officer has been the engineer
Simon Segars
(52), who played a key role in the development of the early arm technology
, since 2013
.
Over the years, the industry has been able to live well with Arm as a neutral technology provider who stayed out of the conflicts between individual players in the industry.
For the future it could be decisive that Nvidia maintains this neutrality despite its own interests in the chip business.
Nvidia boss
Jensen Huang
(57) assured that Arm's license model would remain.
At the same time, Nvidia also wants to offer its graphics technology via the arm platform.
Nvidia also stressed Arm's headquarters should remain in the UK - and expand to include research into robotics, autonomous driving and healthcare.
Softbank boss Masayoshi Son desperately needs money
Softbank bought Arm four years ago for around $ 32 billion and took it off the stock exchange.
Now the Japanese company is getting Nvidia shares valued at $ 21.5 billion and $ 12 billion in cash.
Softbank can later get another $ 5 billion in cash or stock if certain earnings targets are met.
Nvidia is also issuing shares worth $ 1.5 billion to the poor workforce.
more on the subject
Softbank's unicorn ox: How Mr. Son lost the world's biggest tech bet by Jonas Rest and Philipp Alvares de Souza Soares
Arm Holdings sale: Softbank hopes for 40 billion deal
After the Wework debacle: Softbank will remain silent about profits and losses in the future
Nvidia interested in Softbank company Arm: A mega-deal is looming in the chip industry
The proceeds from the sale come in handy for Softbank boss
Masayoshi Son
(63), who is known as the "whale of the Nasdaq" because of numerous investments on the US stock exchanges.
In the past few years, the world's largest tech investor, with its $ 100 billion Vision Fund and aggressive business practices, had driven the dimensions of tech deals worldwide.
After the failed WeWork IPO, however, the investor euphoria has evaporated, at least since the corona pandemic, Softbank urgently needs money.
The investments in the office service provider WeWork or the taxi replacement service Uber turned out to be largely a flop.
In the spring, the company announced that it would sell holdings of up to $ 41 billion.
At the end of June, the Japanese began to sell their shares in the US mobile operator T-Mobile US to Deutsche Telekom.
And in mid-July, the Bloomberg news agency and the Wall Street Journal reported, citing insiders, about Softbank's plans to put Arm on the stock exchange or at least partially sell it.
Nvidia got big with graphics cards for PCs - however, a few years ago it turned out that the company's technology works very well for machine learning and artificial intelligence.
That gave the Nvidia business a new boost.
The company is now also developing computers for driver assistance systems in cars and autonomous driving.
mg / dpa-afx / Reuters
