SoftBank acquires Vision Fund's stake in Arm

SoftBank Group Corp has acquired the 25% stake in Arm Ltd from its Vision Fund unit in a deal that values the chip designer at $64 billion. SoftBank is now expected to sell fewer Arm shares in the initial public offering (IPO) and would likely be retaining a stake of as much as 90% in the company.  

Details of the transaction will be unveiled only when Arm makes public the filing for its blockbuster stock market launch, the sources said.

Arm's capital raising from the IPO would be less than the range of $8 billion to $10 billion it was earlier planning. 

SoftBank is currently in talks to list Arm at a valuation of $60 billion to $70 billion in the IPO, which is most likely happening in September. SoftBank, which took Arm private for $32 billion in 2016, sold a 25% stake in the company to Vision Fund 1 (VF1) for $8 billion in 2017. 

The deal removes a potential overhang for Arm's stock following the IPO, because VF1 had initially planned to cash out its stake in the stock market over time following the listing, while SoftBank has indicated it will remain a long-term strategic investor. 

It was earlier reported in August that SoftBank was in talks to buy the stake from the Vision Fund. The financial terms of the deal were reported on Friday. 

The deal also delivers a major victory for VF1's biggest investors, including Saudi Arabia's Public Investment Fund and Abu Dhabi's Mubadala. They nursed losses after many of SoftBank's bets on startups such as workspace provider WeWork Inc and ride-sharing firm Didi Global went into losses.