News
Japanese telco to reportedly offer $8bn stake in chip designer to secure backing from U.A.E.-based investors.
Softbank plans to sell 25% of its ARM unit to the Softbank Vision Fund, a venture capital fund it is in the process of building in partnership with several wealthy investors, it emerged on Wednesday.
Sources cited by the Financial Times claimed that the stake, worth $8 billion, is being offered in order to help secure backing for the Vision Fund from U.A.E.-based investment group, Mubadala. In return, Mubadala would commit to ploughing $15 billion into the new venture.
According to a report by Bloomberg, selling $8 billion worth of ARM – the U.K.-based chip designer that Softbank acquired last year for €28.8 billion – is separate to the $25 billion contribution that Softbank plans to make to the Vision Fund.
Softbank announced plans to launch a venture capital arm in October 2016.
As well as putting up its own money, the Japan-based telco has also signed a non-binding MoU with the Public Investment Fund (PIF) of Saudi Arabia that could see the sovereign wealth fund invest up to $45 billion in the Vision Fund over the next five years.
In total, Softbank CEO Masayoshi Son hopes to create a venture capital fund with $100 billion to play with.
According to comments Son made at Mobile World Congress last week, that would make it the single biggest VC fund in the world.
As well as putting 25% of ARM into the Vision Fund, Softbank will also put its holding in OneWeb, a satellite provider that aims to deliver Internet access to remote areas.
Son said OneWeb’s long-term objective is to launch 800-2,000 low Earth orbit (LEO) satellites, providing connectivity at speeds of up to 200 Mbps on the downlink, and 50 Mbps on the uplink.
"Think of fibre coming down from space," he explained last week.
