According to media reports,ARM has transferred all of its stake in Chinese joint venture ARM China to SPV, a special purpose vehicle owned by its parent company SoftBank Group, in an effort to speed up its IPO.
Unlike other multinational companies, Arm China has been operating independently, and it has been very unhappy with ARM in the past two years.
Although ARM holds a 47.33% stake in Arm China and is the largest shareholder, it has never been able to control Arm China.
In June 2020, Arm China’s board of directors voted 7 to 1 to oust Chairman and CEO Wu Xiongang, but Wu Xiongang refused to give up power, and the two sides were at odds for a while.
In this situation,ARM’s difficulty in auditing Arm China’s financial situation has become a major obstacle to its listing in the United States.
ARM said that the decision to transfer ARM China’s shares was made after considering “accounting reasons”, but it would not change Arm China’s role as the main distributor of ARM intellectual property in China.
This means that Arm China will continue to operate normally, ARM can continue to receive licensing revenue from Arm China, and in the reported financials, Arm China can be regarded as an investment company rather than a subsidiary.
Analysts believe that the sale of Arm China’s stake could be a deliberate choice by SoftBank to deal with the standoff between Arm and Arm China’s Chinese joint venture.
It is unclear whether the equity transfer has been approved by Wu Xiongang, who holds the company seal required for the company’s transaction.
NVIDIA once tried to acquire ARM at a price of $40 billion, but failed due to regulatory reasons, which also caused huge losses to ARM’s parent company SoftBank Group, and quickly promoted ARM’s IPO.
In February, SoftBank CEO Masayoshi Son said ARM was “most likely” to list on Nasdaq in New York.
It is reported that SoftBank hopes to complete the listing of ARM by the end of March 2023, so the audit must be completed by September this year.
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