SoftBank mulls sale of British chip firm ARM

Kyodo News

Posted at Aug 11 2020 09:59 PM

TOKYO - SoftBank Group Corp. Chairman and CEO Masayoshi Son said Tuesday that selling its British chip design unit Arm Ltd. is an option to help improve its finances as the Japanese technology conglomerate reviews its strategy.

"We are exploring selling part of or all of Arm's value as an option," Son said during an online press briefing on his company's quarterly earnings.

SoftBank acquired the British chip firm in 2016 for $31 billion. Arm is currently 75-percent owned by SoftBank, with the remaining 25 percent held by its tech-focused Vision Fund.

Son revealed that SoftBank has already been in talks over Arm but declined to give further details. Media reports have said Nvidia Corp. has shown interest.

"Another option is to bring forward our plan to list Arm in 2023 to next year or the year after that," Son said, adding that he will review all options "until the last minute."

His remarks came as SoftBank is scrambling to emerge from a huge loss in the business year through last March due to the poor performance of its $100 billion Vision Fund.

For the April-June period, SoftBank reported a record quarterly net profit of 1.26 trillion yen, helped by asset-selling designed to strengthen its financial health. The figure marked an 11.9 percent jump from the same period a year earlier.

In the first quarter of fiscal 2020, SoftBank Group's sales were down 2.0 percent to 1.45 trillion yen.

SoftBank did not disclose earnings on an operating basis or give a full-year forecast.

After reporting a record loss in fiscal 2019, SoftBank pledged to sell up to 4.5 trillion yen worth of assets to improve its financial standing. So far, the amount has reached 4.3 trillion yen, according to SoftBank.

As part of the asset-selling plan, SoftBank has sold two-thirds of its stake in T-Mobile U.S. Inc. with 421.86 billion yen booked in the quarter. It also sold a 5 percent stake in SoftBank Corp., its wireless carrier unit.

"SoftBank is now on the defensive," Son said.

"You may see us making risky moves with wild investments under normal times," Son said. "However, we commit to being defensive in a crisis situation, as was the case during the Lehman (shock)," he said referring to the financial crisis triggered by the collapse of Lehman Brothers in 2008.

SoftBank took a hit in fiscal 2019 from the global coronavirus pandemic that rattled financial markets as its $100 billion Vision Fund incurred a 1.9 trillion yen loss.

In the three months to June, SoftBank's investment returns stood at 983.0 billion yen as its fund segment made 296.6 billion yen.