Arm Holdings Ltd’s imminent initial public offering (IPO) has attracted significant interest from key customers, including tech giants Apple Inc, Nvidia Corp, Alphabet Inc, and Advanced Micro Devices Inc, as well as Intel Corp, Samsung Electronics Co Ltd, Cadence Design Systems Inc, and Synopsys Inc, according to sources familiar with the matter.
Discussions with potential investors are ongoing, indicating broader interest in the IPO.
The IPO, led by SoftBank Group Corp-owned Arm, aims to achieve a valuation ranging between $50 billion and $55 billion, as reported by Reuters.
Clients of Arm have shown willingness to invest within this valuation range. However, this valuation marks a retreat from SoftBank’s recent acquisition, which valued Arm at $64 billion for its 25% stake acquisition.
Strategic investors, such as Apple, Nvidia, and others, are expected to contribute between $25 million and $100 million each to the substantial IPO.
Notably, Arm and SoftBank have earmarked 10% of the IPO’s shares for their clients.
Nevertheless, Amazon.com Inc, initially considering participation in the IPO, has decided against it, according to an unnamed source.
This surge in demand for Arm’s shares has piqued the interest of the biggest tech companies, showcasing a drive to fortify their ties with Arm and prevent rivals from gaining a competitive edge.
Although an investment won’t grant a board seat or strategy control, it could deepen relationships with participating companies and create barriers against potential competitors aiming to acquire Arm in the future.
The response from Arm and SoftBank, as well as the mentioned companies, has yet to be received. Arm’s valuation target was initially disclosed by The Wall Street Journal.
In summary, the IPO of Arm Holdings Ltd has garnered attention from major tech players, who have expressed interest in investing within the projected valuation range.
This move could enhance partnerships and deter potential competitors, underscoring the strategic importance of securing a stake in the chip designer’s future.