Cambridge-based chip designer Arm will seek to list only in the US this year, dealing a major blow to Rishi Sunak’s ambitions to make London the first choice for tech company IPOs.
The company, owned by Japanese conglomerate SoftBank, confirmed its preferred plan to seek a US-only primary listing later this year, rejecting the UK despite strong lobbying from successive prime ministers.
Sunak, his predecessor Boris Johnson and an army of London Stock Exchange and government officials had held on-and-off talks with SoftBank in an attempt to convince it of the merits of a dual, if not full, London listing.
Arm previously had a dual listing on both sides of the Atlantic, before it was acquired by the Japanese company for £24.6bn in 2016, and had been a member of the FTSE for 18 years.
Getting it back, after SoftBank decided on an IPO following the blocking of a $40bn acquisition by US firm Nvidia over competition concerns last year, would have been a big boost to the company’s long-term ambitions. capital from having more technology IPOs.
Arm offered the consolation of indicating that he would seek a subsequent listing in London “in due course”.
Rene Haas, Arm’s chief executive, said on Friday: “After engagement with the UK government and the Financial Conduct Authority over several months, SoftBank and Arm have determined that seeking an exclusive US Arm listing in 2023 is the best way to go. for the company and its stakeholders.
Arm, which is the world’s largest supplier of chip design elements used in products from smartphones to game consoles, has pledged to keep its headquarters, operations and “material intellectual property” in the UK.
The company also said it intends to expand its presence with a new site in Bristol and “continued counting.” “Arm is proud of her British heritage and continues to work with the British government,” the company said. “We will continue to invest in and play a significant role in the UK tech ecosystem.”
City analysts said Arm’s decision to pick the US was another blow to London’s attempt to build the FTSE 100’s tech credentials after Deliveroo’s disastrous IPO and nearly 90% plunge. in the market value of online retailer THG.
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“The UK’s blue-chip index has struggled to attract key industry giants,” said Victoria Scholar, chief investment officer at Interactive Investor. “There have also been some high-profile UK tech disasters. Arm’s abandonment of London is another kick in the teeth for the Square Mile’s appeal to international investors as a go-to destination for tech giants.”
The government and regulators have made changes to UK listing rules in an effort to persuade fast-growing tech companies that London is a worthwhile place to list their shares.
“The UK is carrying out ambitious reforms to the rules governing its capital markets,” a government spokesman said. “We continue to attract some of the world’s largest and most innovative companies, and we highlight Arm’s commitment to expanding its presence in the UK, driving growth, jobs and investment.”
