SK Hynix considers Arm purchase via consortium
South Korean memory maker SK Hynix Inc. is considering whether to bid for intellectual property licensor Arm Ltd. with strategic partners, according to a Yonhap report.
“We are reviewing possibly forming a consortium, together with strategic partners, to jointly acquire it,” Yonhap quoted SK Hynix CO Park Jung-ho, saying after the company’s annual shareholders meeting. “I don’t believe Arm is a company that could be bought by one company,” he added.
Arm is owned at present by Japan’s SoftBank Group, which acquired the UK company in 2016 for about $32 billion. SoftBank is on record as preparing to take Arm public sometime before March 31, 2023 (see Arm to lay-off up to 1,000 workers as it preps for IPO). This was after a $40 billion deal to sell Arm to Nvidia fell through due to regulator resistance (see Analysis: Arm CEO replaced as ‘unwanted’ sale to Nvidia cancelled).
SoftBank is said to expect achieve a valuation for Arm of about $60 billion via an IPO although the parent will not necessarily put all its holding up for sale in the initial listing.
“I want to buy Arm”
SK Hynix is likely seeking to put together a consortium in part to persuade regulators to agree the deal, which they would not in the case of sole prospective purchaser Nvidia. The other reason for a consortium is the cost of deal.
“I want to buy Arm, if not entirely. It doesn’t have to be buying a majority of its shares to be able to control the company,” Yonhap quoted Park saying.
Earlier in the week Park had told journalists SK Hynix was looking for a potential merger in the semiconductor sector. For some time SK Hynix has been looking to expand into a logic and reduce its dependence on the capital-intensive and cyclical memory sector. SK Hynix has just been given approval by South Korea’s antitrust regulator to go ahead with its acquisition of Key Foundry.
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