Nvidia’s takeover of ARM seems increasingly unlikely to materialize, according to information collected by Bloomberg. If in public, the American company is still confident about the completion of the acquisition, it would seem that the story is very different internally.
Regulators wary of Nvidia takeover
The acquisition, for an amount of 40 billion dollars, was announced at the end of 2020 with the ambition accelerate progress and create new solutions that will create an innovative global ecosystem » ; but not everything goes as planned.
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Very quickly, the British regulator, ARM’s native country, launched an investigation into the acquisition, and recently declared that an even deeper investigation was necessary. The European Commission is also investigating the transaction, as is the Federal Trade Commission (FTC), which believes it to be anti-competitive. For their part, the Chinese authorities have said that they will block the takeover if no other country takes care of it.
Nvidia is trying somehow to get out of this situation, but the suspicions of the authorities are solid.
SoftBank would have an alternative for ARM
And for good reason, ARM architectures are used under license almost universally in smartphones and other mobile devices, by brands such as Apple, Intel, Samsung, Qualcomm, Microsoft and Amazon. Nvidia is also one of ARM’s customers, which would prevent it from maintaining the latter’s independence despite what it claims, according to several of its rivals.
The ARM architecture is used by tech giants around the world. Photography: Open Grid Scheduler / Grid Engine / Wikimedia
A group including Qualcomm, Microsoft, Intel and Amazon has provided regulators around the world with what they believe is enough evidence to block the deal. Faced with these many reluctances, more and more people working within Nvidia believe that the acquisition will not be able to come to an end. SoftBank, current holder of ARM, would think about an IPO for the British firm, while the semiconductor sector is popular.
The situation is creating tensions within Nvidia, with some people resigned to the failure of the acquisition, while others believe that management could use the lawsuit filed by the FTC to demonstrate the merits of the takeover.
facade lyrics
The initial agreement between Nvidia and SoftBank will expire on September 13, two years after it was established. However, it may be renewed if an agreement is reached; from the outset, Nvidia said closing the deal would take “ about 18 months », which suggests a finalization around March this year… A deadline which today seems unattainable.
” We continue to support the views expressed in detail in our latest regulatory filings that this transaction provides an opportunity to accelerate ARM’s development and drive competition and innovation. said Bob Sherbin, Nvidia spokesman. SoftBank says to itself, for its part, full of hope “. Remarks which would therefore be facade since the tendency would be more to abandon the acquisition.
This failure, however, would not put Nvidia in perdition: even without counting ARM among its ranks, it is the most valuable semiconductor company in the United States.