back to article SoftBank sells off more than half of Arm China for a bargain $775.2m

SoftBank has announced it is offloading 51 per cent of chip designer Arm's Chinese subsidiary to a China-led group of investors in a deal worth $775.2m. Japan-based SoftBank expects the deal to be done in June 2018 and while it will retain the remainder of Arm and continue to enjoy licensing and royalty revenues, Arm China …

  1. Anonymous Coward
    Anonymous Coward

    Everyone said it was....

    ...was a mistake to sell ARM to China but there you go. Especially as they got it cheap because of the drop in the pound at the time.

    I didn't have an issue though, but then that was only because I made about £2-3k with the shares I had owned for about 2-3 years. And I was just lucky I got them cheap at the time*

    Anon as prob get down votes for that bit. But they always say you have to have no emotions when dealing with shares, otherwise you'll never make money on them.

    *Always wanted to do share dealing. Didn't know what I was doing, just got lucky with them.

    1. Voland's right hand Silver badge

      Re: Everyone said it was....

      ...was a mistake to sell ARM to China but there you go.

      It was sold to a Japanese company.

      Anon as prob get down votes for that bit.

      Well, you should expect that if you start your post with a false statement.

      1. This post has been deleted by its author

      2. Solmyr ibn Wali Barad

        an old joke

        A Chinese man and his Jewish friend were walking along one day when the Jewish man whirled and slugged the Chinese man and knocked him down.

        "What was that for?" the Chinese man asked.

        "That was for Pearl Harbor!" the Jewish man said.

        "Pearl Harbor? That was the Japanese. I'm Chinese."

        "Chinese, Japanese, you are all the same!"

        "Oh!"

        They continued walking and after a while the Chinese man whirled and knocked the Jewish man to the ground.

        "What was that for?" the Jewish man asked.

        "That was for the Titanic!"

        "The Titanic? That was an iceberg."

        "Eisberg, Goldberg, you are all the same."

  2. EveryTime

    What part of the company did they actually sell?

    It appears to be a licensing, marketing and customization subsidiary. It presumably was created to provide the required in-country development partnership -- a proven long-term path to losing your IP and training future competitors. It's most valuable asset is likely an exclusive regional distributorship for licensing IP.

    If that's the case, it was a pretty good price.

    1. Anonymous Coward
      Anonymous Coward

      I'm betting physical IP. The old Artisan libraries etc.

    2. Charlie Clark Silver badge

      If that's the case, it was a pretty good price.

      It's a big if, so the jury's still out on this until, if ever, it becomes clear what was sold.

      Chinese companies routinely pay over the market price for assets as this gives them ways of moving capital around the usual restrictions, ie. they're not idiots when it comes to negotiating.

  3. Anonymous Coward
    Anonymous Coward

    they sold a license to the Chinese state

    so basically they just sold a architectural license to a state (you can argue like lawyers)

    It wont be spun like that (just physical IP etc ) but access to all the information will be key... Now it will be hard to keep the Chinese state out of any discussions or audit effectively (not that anyone in the region did audits anyway)

    The state wanted/needed a reason they should stick with ARM rather than try other architectures...

    1. Wellyboot Silver badge

      Re: they sold a license to the Chinese state

      An improvment on the methods the chinese state allegedly employed previously.

    2. JassMan

      Re: they sold a license to the Chinese state

      No. They sold 51% to a Chinese investment company called Hou An. In fact is a leveraged deal and Singaporean venture capitalists also own a not insignificant chunk. As I understand it Arm Technology China is the Qualcomm of the Chinese world, incorporating Arm designs into their SOCs then licencing those designs to other chinese companies. Since ArmTechChina represents ~20% of Arm Holdings the price still seems a little low but my guess is that ARM still get full royalties on the cores while ArmTechChina get to keep all royalties on the addons.

      1. JBowler

        Re: they sold a license to the Chinese state

        >As I understand it Arm Technology China is the Qualcomm of the Chinese world

        I think that hits the nail on the head. Given the problems the US administration has invented with Qualcomm it must be attractive to Chinese investors to have a licensee for ARM which is not directly involved in the US. Particularly as ARM is now controlled from Japan so subject to a more rational eastern approach to deal making; not without the ubiquitous and lugubrious US influence but at least inclined to give it less significance than the Europeans.

        Cutting the US and Europe out of the equation makes sense. I can't see that the price is low; it's just a licensee isn't it?

  4. Anonymous Coward
    Anonymous Coward

    Easy to get hold of chip designs?

    Easier than ringing up ARM and saying "I'd like to purchase a license", which a number of China based companies already have? Talk about worrying over nothing!

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