SoftBank plans Arm stake sale to secure Abu Dhabi backing for $100bn fund

Japanese telecoms group SoftBank is reportedly planning to sell a stake in UK chip designer Arm to its proposed $100bn investment fund to secure the backing of Abu Dhabi’s Mubadala.

The Financial Times reports that the company is planning to sell 25 per cent of Arm, worth $8bn, to the Vision Fund following a request from the Abu Dhabi government-backed firm.

Read: Abu Dhabi in talks to invest in $100bn SoftBank fund

The two sides are said to be close to sealing an agreement that would see Mubadala commit $15bn, sources told the publication.

If the deal goes ahead it would mark the second major Gulf investment in the fund after Saudi Deputy Crown Prince Mohammed bin Salman pledged the kingdom’s Public Investment Fund would contribute up to $45bn last year.

SoftBank is also contributing $25bn – including the Arm stake, with smaller investments confirmed by Apple, Taiwan’s Foxconn and Qualcomm and Oracle founder Larry Ellison.

“We’re having ongoing, fruitful discussions over our participation in the fund,” Mubadala was quoted as saying.

“Arm is certainly a strong technology company with great, continued potential. The Abu Dhabi group has been focused on growing its technology investments over the past decade, including in the semiconductor sector.”

Mubadala last week sold nearly a third of its stake in semiconductor firm Advanced Micro Devices (AMD) for around $613m. It also fully owns chipmaker Globalfoundries.

Read: Abu Dhabi’s Mubadala sells part stake in Advanced Micro Devices

SoftBank agreed to buy arm for $32.4bn in July last year, weeks after the Brexit vote caused the value of the pound to fall.