Arm opts for US listing in blow to Rishi Sunak
But will retain HQ in the UK
British chip designer Arm has announced it will list its shares on the New York Stock Exchange later this year, thwarting the British government's hopes to see Arm return to the London stock market.
The company did not entirely dismiss the possibility of a future listing in London, saying it plans to consider a potential IPO in the city at a later time.
"After engagement with the British government and the Financial Conduct Authority over several months, SoftBank and Arm have determined that pursuing a US-only listing of Arm in 2023 is the best path forward for the company and its stakeholders," said CEO Rene Haas.
As a sop to the government, Haas added that Arm is expanding its presence and workforce in the UK. It is also planning to establish a new location in Bristol, while retaining its material intellectual property, headquarters and operations in the country.
"Arm is proud of its British heritage, and continues to work with the British government."
Arm's decision is a significant setback for Rishi Sunak's goal of positioning London as the first choice for technology company IPOs.
Sunak, his predecessor Boris Johnson, and numerous government and London Stock Exchange representatives had been in discussions with SoftBank about a potential dual listing for Arm.
The talks involved considering both the London Stock Exchange and the Nasdaq in New York as listing locations.
In January, the Financial Times reported that Rishi Sunak had met with Haas in Downing Street to explore a London listing.
Masayoshi Son, SoftBank's founder, participated via video conference.
According to a report in The Sunday Times earlier this month, the Financial Conduct Authority (FCA) was willing to soften stock exchange rules to secure an Arm listing in London.
Earlier, the chip designer had expressed concerns to British ministers and regulators regarding "related-party transaction" rules, fearing they would compel it to report any transactions with its owner SoftBank Group or any of SoftBank's hundreds of investments.
The Sunday Times said the FCA had assured Arm it was ready to consider a waiver on regulations governing "related-party transactions".
Arm had a dual listing on both the London Stock Exchange and the Nasdaq for 18 years before SoftBank acquired it for $32 billion in 2016.
The chip firm, based in Cambridge, designs the chips used in a significant portion of the world's smartphones.
The company reported record revenues for its first financial quarter (ended June 2022), making it one of the bright spots for SoftBank Group, which made a group-wide $23.5 billion loss for the same period.
Securing Arm's London listing would have been a major win for the British government's long-term ambition of increasing the number of tech IPOs in the city.
"The UK is taking forward ambitious reforms to the rules governing its capital markets, building on our continued success as Europe's leading hub for investment, and the second largest globally," a government spokesperson told the BBC.