The Chinese owner of British chip maker Imagination Technologies has abandoned a $1 billion sale after its revenues were battered by President Trump’s tariffs.
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As reported by The Sunday Times, U.S.-based Chinese-owned investment group Canyon Bridge has abandoned the sales process following disappointing annual results.
U.S. Exposure
Accounts for Imagination show it made a pre-tax loss of $51 million (£38 million) last year as revenues plunged 30% to $108 million. The annual report, signed off in June but published last week, indicated that the company was on course to breach loan covenants and that it faced “material uncertainty”.
As a U.K.-based firm relying on cash from U.S. sales it is likely that President Trump’s tariffs have left it exposed. Indeed, the firm’s accounts noted that tariffs “may create volatility” in its IP sales.
A spokesperson for Imagination, whose customers reportedly include Alphabet-owned Google (GOOGL), Texas Instruments (TXN) and MediaTek, said that “trading conditions have since improved” and bosses remained confident about the financial health and future prospects of the company.
They also said the firm retained the “full support” of its owner.
It was also confirmed that Canyon Bridge, which bought Imagination in 2017 for around £550 million, had been looking to sell the company during the summer, before “poor market conditions” made it withdraw.
Apple Links
Imagination was reportedly put up for sale in January with financial advisory and asset management firm Lazard (LAZ) appointed to find a buyer.
Imagination, which was once listed in London, hit its peak valuation in 2012 when it was worth nearly £2 billion. However, it put itself up for sale some five years later, after one of its biggest partners, Apple (AAPL), said that it would stop using the company for its graphics chips in the iPhone and its other products by 2019.
However, its link to China at a time when U.S. and Chinese relations over the growth of AI are strained may have put some buyers off.
A recent research paper by U.K.-China Transparency also claimed that Chinese companies have been pillaging Imagination’s intellectual properties to boost their domestic chip development.
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