Intel Eyes Significant Stake Acquisition in Arm Amidst Its Upcoming IPO
Intel Corporation, a leading multinational technology company, has reportedly shown interest in acquiring a significant stake in Arm, a renowned British semiconductor and software design company. The interest emerges as Arm, owned by the Japanese corporation SoftBank since 2016, plans to carry out an initial public offering (IPO) by the end of this year to raise between $8 billion to $10 billion.
The news first broke out by Reuters, citing its own sources, followed by confirmation from Bloomberg. The reports suggest that negotiations between Intel and SoftBank are ongoing, although no details about the potential deal structure or its certainty have been revealed. Should these talks yield any positive results, Intel might appear as an “anchor investor” in Arm’s investor prospectus ahead of the placement. Typically, anchor investors buy a company’s shares ranging from $100 to $200 million.
Furthermore, Arm is reported to have been in talks with other potential IPO subscribers who could also become significant stakeholders in the British company. The semiconductor giant is currently preparing to list its shares on the Nasdaq, having filed an application in April and aiming to finalize the placement by the end of the year.
Arm and Intel have recently shown technological convergence. The former has expressed willingness to offer Arm clients a toolset for creating Arm architecture processors, which Intel could subsequently manufacture on a contract basis. Independent estimates suggest that Arm’s capitalization during the IPO could range from $30 billion to $70 billion. However, SoftBank has expressed its intention to remain the primary shareholder of the British holding.
While the potential stake acquisition could significantly impact the semiconductor industry, neither party has yet commented on the situation. The positive outcome of the negotiations is not guaranteed, meaning that Intel could possibly back out from this idea entirely.
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