Softbank to shift 25 per cent stake in ARM to fund backed by Saudi Arabia, Apple and Qualcomm

Transfer of stake will help SoftBank fulfill its promise to invest "at least $25bn" in SoftBank Vision Fund

SoftBank Group, which bought UK chip designer ARM in July last year for £24.3bn, is planning to pass-on a 25 per cent stake in the company to a technology fund backed by the government of Saudi Arabia in a transaction that will be concluded within weeks.

The move comes around six months after SoftBank completed the purchase of ARM in one of the biggest-ever merger and acquisition (M&A) deals in the UK, and promised to create a $100bn technology investment fund with the government of Saudi Arabia.

When SoftBank announced the plans, it promised that it would invest "at least $25bn" in the SoftBank Vision Fund, alongside the Public Investment Fund of the Kingdom of Saudi Arabia.

The Saudi sovereign investment fund had committed to invest as much as $45bn into the SoftBank Vision Fund, despite the economic difficulties caused by the fall in the price of oil in recent years.

The transfer of a one-quarter chunk in ARM, Britain's biggest technology company, would go a long way towards fulfilling SoftBank's promise, but equally may suggest that the company has struggled to raise all of the funds that it promised for it independently.

Other investors in the fund include Apple and Qualcomm, two of ARM's biggest and best-known licensees, who wanted an indirect stake in the company, as well as Hon Hai Precision, the Taiwanese company better known by its Foxconn brand name. Apple had a major stake in ARM when it was spun-out of Acorn Computers in the 1990s until the SoftBank acquisition last year.

According to the Wall Street Journal, all that remains to tie-up are the negotiations pinning down a precise valuation on the stake.

The Fund is intended as a vehicle for investments in companies developing technologies that SoftBank founder and CEO Masayoshi Son believes will be central to the future, including artificial intelligence, big data and the so-called Internet of Things. Much of this will be based on ARM's research.