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March 3, 2023

Arm to be listed in US as SoftBank delivers a blow to UK tech ambitions

The chip design-giant will IPO in New York later this year despite intense lobbying from government ministers over a London listing.

By Matthew Gooding

British chip design giant Arm will be listed on the New York Stock Exchange in the US, when it goes public again later this year, its parent company SoftBank has announced. The news is seen as a blow to the UK’s ambitions to be a global tech hub, with the government having hoped to persuade Arm to list in London instead.

Arm will be listed on the New York Stock Exchange later this year. (Photo by T. Schneider/Shutterstock)

Confirming the news this morning, Arm executives said they would consider a future IPO in London, but did not declare any timescales for when this might happen.

“After engagement with the British Government and the Financial Conduct Authority over several months, SoftBank and Arm have determined that pursuing a US-only listing of Arm in 2023 is the best path forward for the company and its stakeholders,” said Arm CEO Rene Haas.

Arm US listing a blow to UK tech

Chips based on Arm designs power the vast majority of the world’s advanced mobile devices, including the iPhone. Increasingly, the company’s low-power, high-performance blueprints are also being used in enterprise technology too, with Apple having launched its own range of Arm-based processors, and several companies making Arm-based server chips suitable for advanced workloads such as artificial intelligence.

Based in Cambridge, Arm has been owned by SoftBank since 2017, when the Japanese conglomerate purchased the company for $32bn and delisted it from the London markets. Since then it has experienced sluggish growth and this, together with several other key investments tanking, has led SoftBank founder Masayoshi Son to decide to offload the chip designer.

SoftBank agreed a deal to sell Arm to another chipmaker, Nvidia, in 2020 for $40bn, but this deal collapsed a year later amid widespread regulatory and industry opposition. Subsequently, Son announced SoftBank would seek a fresh public listing for Arm.

The UK government has been working hard to persuade SoftBank to pursue a joint listing for Arm, with Prime Minister Rishi Sunak having reportedly lobbied Haas at a meeting earlier this year, but their efforts have failed.

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Is Arm still a UK company?

Arm said it would retain its Cambridge headquarters after the IPO, and plans to open a new site in Bristol, where a cluster of semiconductor companies are based.

However, with Haas and Arm’s other senior executives all based in the US, and the company set to list in New York, whether it can still be considered a UK tech business is open to question.

SoftBank’s decision to list Arm in New York reflects a wider trend of tech companies shunning or leaving the London markets. Companies including enterprise IT stalwart Micro Focus and cybersecurity business Avast have left the LSE in recent months to go private following takeovers by foreign buyers.

A government spokesperson said: “The UK is taking forward ambitious reforms to the rules governing its capital markets, building on our continued success as Europe’s leading hub for investment, and the second largest globally.

“We continue to attract some of the most innovative and largest companies in the world – and note Arm’s commitment to expanding its presence in the UK, providing a boost to growth, jobs and investment.”

Read more: Arm chips will be mainstream in PCs by 2024 – Qualcomm CEO

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