Arm Ltd’s Valuation Touches $64 Billion as SoftBank Buys Back Vision Fund’s Share

SoftBank Group Corp has completed the purchase of a 25% share of Arm Ltd that it hadn’t held before, from its Vision Fund division, placing the chip firm’s valuation at around $64 billion, based on insider knowledge.

Come Monday, Arm will disclose more about this transaction as it preps for a notable entry into the stock market. These insights come from sources who wish to remain unidentified given the private nature of the discussions. Following this move, SoftBank might release fewer shares of Arm during its forthcoming IPO. Rumors suggest SoftBank could hold close to 90% of Arm post-IPO, possibly affecting the capital Arm aims to generate, which might be below the initially estimated $8 billion to $10 billion range.

Talks are ongoing to list Arm at a value ranging from $60 billion to $70 billion for its IPO, set for September, as mentioned by Reuters in prior reports. For some context, SoftBank acquired Arm for $32 billion in 2016 and later offloaded a 25% piece to Vision Fund 1 (VF1) at a price of $8 billion in 2017.

This new acquisition could ease potential worries over how Arm’s stocks will perform after the IPO. Earlier, VF1 had a plan to gradually reduce its holdings post-listing, while SoftBank’s goal has consistently been long-term investment.

Earlier in the month, Reuters shed light on SoftBank’s intent to reclaim the stake from the Vision Fund, and The Wall Street Journal discussed the financial intricacies of this move.

This latest development is a significant boost for primary backers of VF1, including the major funds from Saudi Arabia and Abu Dhabi, particularly after past investments in companies like WeWork and Didi Global didn’t fare too well.

As Arm gears up for its market debut, there’s a buzz about a potential resurgence in the U.S. IPO market, after a quiet spell of nearly a year and a half. Other big names like Instacart and Klaviyo Inc are also rumored to make their stock market entries in New York this September.

Coverage by Anirban Sen from New York, with additional insights from Milana Vinn in New York and Stephen Nellis from San Francisco. Edited by Chizu Nomiyama and Mark Potter.