TOKYO: SoftBank Group Corp. said Monday it has signed a deal to sell all of its shareholdings in Arm Ltd. to Nvidia Corp. for up to 40 billion dollars, or about 4.2 trillion yen.
The Japanese technology conglomerate is cashing out the British semiconductor designer as part of its efforts to accelerate asset sales in order to shed interest-bearing debts and secure funds to buy back its own shares amid an economic turmoil triggered by the novel coronavirus pandemic.
SoftBank Group aims to complete the sale of Arm, currently a wholly owned subsidiary of the Japanese firm, to Nvidia, a U.S. chipmaker, in March 2022, after acquiring necessary approvals from British, Chinese, U.S. and other regulatory authorities.
Of the acquisition price, Nvidia will pay at least 21.5 billion dollars in the form of its common stock. As a result, SoftBank Group will become a large shareholder in the chipmaker with an equity stake of about 6.7 pct to 8.1 pct.
“SoftBank is excited to invest in Arm’s long-term success as a major shareholder in Nvidia,” SoftBank Group Chairman and Chief Executive Officer Masayoshi Son said in a statement.
Arm is a leading designer of semiconductors for smartphones, enjoying a market share of nearly 90 pct. With the acquisition of Arm, Nvidia, a graphics processing chip powerhouse, hopes to ramp up its business of artificial intelligence-related semiconductors, which are growing in demand.
SoftBank Group bought Arm for about 3.3 trillion yen in 2016, positioning the company as the most important destination of strategic investment.
The sale will give SoftBank Group proceeds of nearly 1 trillion yen, and the focus is now on how the company will use the funds.
SoftBank Group has clinched asset sale deals worth a total of 6 trillion yen by the end of August, compared to the initially-targeted 4.5 trillion yen.