SoftBank to meet with Samsung to explore ‘strategic alliance’ Arm

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SoftBank Chief Executive Masaeshi Son will travel to Seoul next month to begin talks with Samsung on a strategic partnership between the South Korean tech conglomerate and British chipmaker Arm, which is owned by the Japanese group.

The talks could mark a major strategic shift for Son, which bought Arm for $32 billion in 2016 and claimed at the time that it was the core SoftBanklong term vision.

SoftBank tried to sell Arm to chip maker Nvidia, but abandoned those plans this year after facing opposition from competition authorities.

After that setback, Son turned his attention to Arm’s initial public offering in the US, a move that prompted intense lobbying by the UK government to ensure that some part of the listing takes place in London.

In a statement on Thursday, Son said: “I intend to visit Korea. I am looking forward to visiting Korea for the first time in three years. I would like to talk to Samsung about a strategic alliance with Arm.”

In came SoftBank and its flagship technology investment fund, the Vision Fund under enormous pressure this year, as equity markets tumbled and technology valuations tumbled.

The founder of the tech conglomerate behind the $100 billion Vision Fund has not traveled since the outbreak of the Covid-19 pandemic in 2020.

Samsung confirmed Son’s visit, saying it expects him to make an offer on the matter handalthough he did not know that there would be an offer.

“Strategic alliance is a vague and broad term,” the Samsung executive said. “If he offers to sell us Arm, we should consider it on a common basis.”

Son said in August that he was in “defensive mode” prompted by the sell-off SoftBank’s stake in Alibaba and examining the sale of other assets, including private equity group Fortress.

Analysts said the worsening situation in the US stock market is not conducive to the proposed Arm IPO.

They added that Samsung would be interested in buying Arm because of its weakness in the non-memory chip business, but it would be difficult for the South Korean company to pull off a deal alone as it would face the same regulatory hurdles as Nvidia.

“Given Arm’s unique position in the non-memory market, monopoly risks increase if it is absorbed by a particular company,” said James Lim, an analyst at US hedge fund Dalton Investments.

“Samsung is likely to face less regulatory opposition than Nvidia, but it would still be difficult for the company to proceed with the deal alone, given its position in the semiconductor market. He may form a consortium with Intel and others to reach a deal.”

Shares in SoftBank Group traded 2.2 percent lower in Tokyo on the news, while Samsung fell 1.3 percent in Seoul, underperforming the broader market.

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