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Exclusive-Arm enrolls major technology companies for an IPO at valuation sources of $50 billion to $55 billion

By Echo Wang

NEW YORK (Reuters) – Customers of Arm Holdings Ltd, including Apple Inc, Nvidia Corp, Alphabet Inc and Advanced Micro Devices Inc, have agreed to invest in the chip designer’s IPO, according to people familiar with the matter.

Intel Corp, Samsung Electronics Co Ltd, Cadence Design Systems Inc and Synopsys Inc have also agreed to participate in the offering as investors, the sources said. Talks are ongoing and some other potential investors are also in talks to invest in the IPO, the sources said.

SoftBank Group Corp, which owns British Arm, is targeting a valuation of between $50 billion and $55 billion, Reuters reported earlier on Friday. Arm’s clients have agreed to invest in that valuation range, the sources said.

While it’s possible that demand for Arm’s stock will lead to a higher valuation by the time it goes public, the move represents a drop from the $64 billion valuation at which SoftBank acquired a 25% stake in the company. that it does not yet possess. of the $100 billion Vision Fund last month.

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Apple, Nvidia and the other strategic investors have agreed to invest between $25 million and $100 million each in the blockbuster IPO, the sources said. Arm and SoftBank have reserved 10% of the shares that will be sold for their clients at the IPO, Reuters previously reported.

Amazon.com Inc, which had previously held talks to invest in the IPO, has decided not to participate, one of the sources said, requesting anonymity because the discussions are confidential.

A battle between Arm’s clients, including the world’s largest technology companies, to get shares in the IPO tests the semiconductor designer’s allegiance to not take sides in the chip industry.

The interest is fueled by companies’ desire to expand their commercial relationship with Arm and ensure rivals don’t get an edge, Reuters previously reported.

While an investment in the IPO would not come with a seat on Arm’s board or the ability to dictate strategy, it could strengthen ties with each participating company and make it more difficult for a competitor to acquire Arm later on. to take.

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Arm and SoftBank did not immediately respond to requests for comment.

AMD, Intel, Synopsys and Nvidia declined to comment. Alphabet, Amazon, Apple, Samsung and Cadence did not immediately respond to requests for comment. The Wall Street Journal reported on Arm’s valuation target earlier on Friday.

(Reporting by Echo Wang in New York; editing by Anirban Sen and Rosalba O’Brien)

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