Arm IPO could be blocked by UK on national security grounds
The UK government is reportedly hinting it may use national security laws to force Arm to hold its IPO on the London markets instead of in the US.
Arm's current owner SoftBank has already faced problems from China over getting an Initial Public Offering (IPO) that would see the processor design firm listed on the New York Stock Exchange. Now the UK is pressing for SoftBank to list Arm in London instead.
According to the Financial Times, the UK government has considered using powers under its new National Security and Investment Act (NSIA), but it has not formally done so. Instead, an unspecified source involved says that the UK is so far using "carrots" instead of "sticks" over the issue.
However, reportedly the message to SoftBank, according to the source, was effectively "you don't want to make an enemy of us."
Internally, the UK government is divided over using NSIA regulations because it's debatable whether they even apply. According to the Financial Times, the government denies having raised national security concerns with SoftBank.
Nonetheless, the source reports that SoftBank's leadership were aware of what was described as a ploy. A second source said that national security issues would come in to play if a non-UK company used the IPO to take a significant stake in Arm.
SoftBank does not have to pick a listing venue for some months yet, and it is possible that it will adopt a dual-listing. The Financial Times says this would be seen as a win for the UK, which following Brexit and government policies is seen as less attractive for technology companies.
The move to create a separate Arm firm through an IPO follows SoftBank's failure to sell the company to Nvidia. In that case, Nvidia backed out of the deal after national security concerns from the UK, and anti-competition issues in the US.
Read on AppleInsider
Arm's current owner SoftBank has already faced problems from China over getting an Initial Public Offering (IPO) that would see the processor design firm listed on the New York Stock Exchange. Now the UK is pressing for SoftBank to list Arm in London instead.
According to the Financial Times, the UK government has considered using powers under its new National Security and Investment Act (NSIA), but it has not formally done so. Instead, an unspecified source involved says that the UK is so far using "carrots" instead of "sticks" over the issue.
However, reportedly the message to SoftBank, according to the source, was effectively "you don't want to make an enemy of us."
Internally, the UK government is divided over using NSIA regulations because it's debatable whether they even apply. According to the Financial Times, the government denies having raised national security concerns with SoftBank.
Nonetheless, the source reports that SoftBank's leadership were aware of what was described as a ploy. A second source said that national security issues would come in to play if a non-UK company used the IPO to take a significant stake in Arm.
SoftBank does not have to pick a listing venue for some months yet, and it is possible that it will adopt a dual-listing. The Financial Times says this would be seen as a win for the UK, which following Brexit and government policies is seen as less attractive for technology companies.
The move to create a separate Arm firm through an IPO follows SoftBank's failure to sell the company to Nvidia. In that case, Nvidia backed out of the deal after national security concerns from the UK, and anti-competition issues in the US.
Read on AppleInsider
Comments
SoftBank tried to sell ARM to nVidia, a US company
UK government said no for national security reasons
Now SoftBank want to sell off ARM on a stock exchange
Many stock exchanges exist around the world, US ones are often more popular for tech stocks
Article says that the UK government may require SoftBank to use the London stock exchange, again for national security reasons
Article also says that if a non-UK company tries to buy a controlling interest in ARM then the UK government may get involved again
thank you.
Thanks! I was going to leave it at that, but since you asked what other context we need, "UK government said no for national security reasons" is not self explanatory. What does that mean in this context? Are they using ARM to spy on every user and don't want to be found out? The term national security is just so over used it's difficult to know how to interpret that sentence.
Note: there is a lesson for the currently declining USA in there somewhere.
There's been plenty written about this, so I won't regurgitate it.
Weaponising technology/IP can mean restricting or banning its use by competing adversies.
The government that is 'home' to that technology or IP can try to exert legal coercion through parliamentary acts, executive orders or plain arm twisting (no pun intended) to gain some kind of advantage. Putting everything under the 'national security' umbrella is a convenient 'catch all' for most situations.
Determining where 'home' is can be a prickly pear but no doubt something like a listing on an US exchange would make the US government see it has sway on things.
There is also the issue of which parts of a technology can fall under which government influence.
Currently ASML (a Dutch company) sees itself unable to sell EUV lithography equipment to China or Chinese companies simply because a small part of it uses technology that originated in the US. Thus is said to be limited by US executive orders on the use of US technology in China or by Chinese companies.
In the world of EDA software, a German company bought one of the major US players. The technology is now wholly owned by that German company which probably has US investors too. They can't sell to China either and for the same reasons.
It's all a bit of a mess in terms of who owns or who has rights on technology use because it's often hard to determine how much of a technology actually originated where.
That won't stop governments trying to exert influence though.
The ironic thing is that most attempts to weaponise technology actually backfire in the long term.
A case in point is a major US EDA company stating (off the record) that they would rather customers it can't currently sell to, hacked their software licence codes than pay for them because the only alternative is for those 'banned' nations to brew their own and then they'd have huge new market competitors to deal with.
The company was founded in November 1990 as Advanced RISC Machines Ltd and structured as a joint venture between Acorn Computers, Apple, and VLSI Technology. Acorn provided 12 employees, VLSI provided tools, Apple provided $3 million investment. Larry Tesler, Apple VP was a key person and the first CEO at the joint venture.
ARM Founding on Wilipedia