Arm Halts IoT Software Spin-Off Plans Amid Acquisition Rumors

‘After further diligence, we have determined that both IoTP and Data can realize the same benefits as independent operating businesses, each with their own P&L, under the Arm Limited umbrella with less operational disruption,’ an Arm spokesperson says in confirming its reversal of a previously announced spin-off plan.

Arm has halted its plan to spin off two IoT software businesses into standalone entities owned by parent company SoftBank Group amid rumors that Nvidia and other companies are interested in acquiring the British chip designer.

An Arm spokesperson confirmed to CRN on Tuesday that the company has reversed a previously announced plan that it would transfer its two IoT Services Group businesses, IoT Platform and Treasure Data, to new entities under SoftBank. The Wall Street Journal first reported the news Monday.

While Arm initially aimed to give the two businesses “their own operating structures and business strategies optimized for success” with the proposed spin-off, the company decided that the two IoT units could continue to operate under Arm with operations and accounting kept separate from its silicon licensing business, according to the spokesperson.

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“After further diligence, we have determined that both IoTP and [Treasure] Data can realize the same benefits as independent operating businesses, each with their own P&L, under the Arm Limited umbrella with less operational disruption,” the spokesperson said. “We will share more details once the proposed transfer of the businesses has been completed.”

When Arm announced its plan to spin off the two IoT businesses on July 7, the company said the move would have allowed it to “deepen its focus on its core semiconductor IP business,” which includes the silicon designs it licenses for processors used by Apple, Amazon Web Services and a plethora of other companies for everything from mobile devices to servers.

The week after the spin-off plan was announced, reports stated that SoftBank was looking to act on its previous intentions of selling Arm or returning it to the public market through an initial public offering.

Multiple reports have stated that GPU maker Nvidia is interested in acquiring Arm and that a deal could come together before the end of the summer. Earlier this month, Nikkei Asian Review reported that key Apple suppliers TSMC and Foxconn are reportedly interested in investing in Arm.