No dual-listing for Arm as firm chooses New York’s Nasdaq

Despite the UK government’s best efforts, semi-conductor company Arm has decided to float its shares only in New York following its initial public offering (IPO). The UK government had been trying to lure the firm to go for a dual listing in New York Nasdaq and the London Stock Exchange.

"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,” Arm chief executive Rene Haas said in a statement.

There have been multiple attempts by the UK government to get the dual listing including one in September last year that was led by former UK Prime Minister Liz Truss and chancellor Kwasi Kwarteng.

In January this year, it was also reported that Prime Minister Rishi Sunak had hosted Haas at Downing Street to try and negotiate a deal. Masayoshi Son, founder and CEO of SoftBank was also at the meeting.

And when it all seemed not to be working, there were rumours that the UK government was considering invoking the National Security and Investment Act (NSIA), which gives ministers the power to intervene in mergers and acquisitions on the grounds of national interest. However, that would have backfired seeing as Arm is already owned by a foreign organisation.

But, all hope is not lost. Haas has said that the company will consider a dual listing in due course. The company will also be keeping its headquarters in Cambridge, UK as well as its “material IP” and has plans to open a new site in Bristol. The news will come as another blow to the FTSE 100 shares index, seeing as London has already lost its position as the top European trading centre following Brexit.

Industry experts are conflicted on the news with some believing that the UK government is to blame for the snub. Russ Shaw, founder of Tech London Advocates says that Arm’s decision is a direct consequence of the UK government allowing the firm to be sold to a foreign entity.

"Arm's journey to the Nasdaq was somewhat sealed when it was allowed to be sold to an overseas acquirer back in 2016. Nations like the US and China that recognise the strategic value of chip companies would not have allowed such a decision to be made, and the UK must now endeavour to proactively protect its semiconductor industry," he said.

However, Gartner vice president for semiconductors and electronics Richard Gordon disagrees with this theory saying that the move was financially motivated.

"I don't think this has much to do with the UK's lack of a 'coherent technology strategy,' which is a given. More likely it's to do with financial market considerations," he said.