SoftBank Group Corp has postponed a major deal to sell Arm Ltd to U.S. chip maker Nvidia Corp for up to $80 billion, citing regulatory hurdles, and will instead seek to list the company.

Britain’s Arm, which appointed a new CEO on Tuesday, said it will go public by March 2023, while SoftBank CEO Masayoshi Son indicated it will be in the United States, likely on Nasdaq.

SoftBank acquired Arm, whose technology is used in the iPhone and nearly all of Apple’s other smartphones, for $32 billion in 2016.

The collapse of its sale marks a major setback for the Japanese conglomerate’s fundraising efforts at a time when its portfolio valuations are under pressure.

Many of SoftBank’s portfolio companies are trading below their listed price, with office-sharing company WeWork, Grab and used-car platform Auto1 falling last quarter.

“It (Arm) had rare signs that SoftBank’s investments were turning to gold, but instead Arm will return to list in the financial markets, where tech stocks have fallen seriously in price recently,” said Hargreaves Lansdown analyst Suzanne Streeter . , adding that “such an inflated valuation is likely to be far from achieved.”

The cash and stock deal with Nvidia was announced in 2020, but the U.S. Federal Trade Commission sued to block it in December, arguing that competition in the nascent markets for chips for unmanned cars and a new category of networking chips could be weakened. hurt. hurt.

The buyout has also come under scrutiny in the U.K. and European Union and has yet to win approval in China, which has previously refused to approve cross-border chip acquisitions.

The sale price, which depended on Nvidia’s share price, was initially pegged at around $40 billion, but rose along with Nvidia’s share price to around $80 billion late last year, although the California-based company’s stock has since fallen.

The failure to acquire Arm is a missed opportunity for Nvidia, said CFRA Research analyst Angelo Zino, adding that the collapse of the deal eliminates the stock glut and investors can now “focus on the company’s attractive fundamentals.”

Nvidia shares were down 1.9 percent in pre-call trading.

During the company’s earnings call Tuesday, SoftBank CEO Son, who said the company had originally considered listing Arm but instead decided to sell it because of the pandemic, sought to put a positive spin on the canceled sale.

He said Arm would revolutionize areas such as cloud computing and meta-universe, and that it would be the most significant IPO the chip industry has ever seen.

SoftBank said it would recognize the $1.25 billion breakup fee that Nvidia contributed as profit in the fourth quarter.

NEW CEO

Arm in a separate announcement appointed Rene Haas to replace Simon Segars as CEO and board member, effective immediately. An industry veteran, Haas joined Arm in 2013 and previously spent seven years at Nvidia.

“We are excited about the opportunity to become a public company again,” Haas told Reuters in an interview.

SoftBank said Arm’s net sales rose 40 percent to $2 billion in the nine months through December.

Acquiring Arm would put Nvidia in even sharper competition with rivals in the data center chip market such as Intel and Advanced Micro Devices Inc.

Arm licenses its architecture and technology to customers such as Qualcomm Inc, Apple and Samsung Electronics ) Co Ltd, which develop chips for devices ranging from cell phones to computers.

Nvidia has become the most expensive U.S. chip company because of its graphics processor chips. While still considered critical for gaming, GPUs have become much more widely used for artificial intelligence and other advanced fields.

Nvidia said in a statement that it will retain its 20-year Arm license.

The scrapping of the deal further underscores the difficulties companies face in trying to convince antitrust regulators and governments to approve large technology deals, especially in the semiconductor industry.

Last week, a $5 billion deal between Taiwan’s GlobalWafers and German chip supplier Siltronic fell apart after German regulators failed to approve it in time.

In 2018, Qualcomm backed out of a $44 billion deal to buy NXP Semiconductors after failing to get Chinese regulatory approval and former U.S. President Donald Trump blocked microchip maker Broadcom’s takeover bid for Qualcomm.