FILE PHOTO: The logo of technology company Nvidia is seen at its headquarters in Santa Clara, California February 11, 2015. REUTERS/Robert Galbraith/File Photo
February 8, 2022
By Jane Lanhee Lee
(Reuters) -SoftBank Group Corp’s sale of Arm Ltd to U.S. chipmaker Nvidia Corp has collapsed, a source familiar with the matter told Reuters on Monday, adding that Arm would plan for an IPO instead of the sale, which would have been worth as much as $80 billion.
The deal, announced in 2020, has faced several regulatory hurdles. The U.S. Federal Trade Commission sued to block it in December, arguing that competition in the nascent markets for chips in self-driving cars and a new category of networking chips could be hurt if Nvidia carried out the purchase.
The buyout is also under the scrutiny of British and EU regulators amid concerns that it could push up prices and reduce choice and innovation.
The sale would have marked an early exit from Arm for Softbank, which acquired it for $32 billion. Chief Executive Masayoshi Son has lauded the potential of Arm, but is slashing his stakes in major assets to raise cash.
Nvidia has become the most valuable U.S. chip company on the strength of its graphic processor chips. Although still seen as crucial for gaming, graphic processors have become much more widely used for artificial intelligence and other advanced fields.
An Arm acquisition would have put Nvidia into even more intense 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 that design chips for devices from mobile phones to computers.
Nvidia declined to comment. Arm and SoftBank did not immediately respond to a Reuters request for comment.
The value of the deal, which depended on Nvidia’s stock price, was originally pegged at about $40 billion and rose with Nvidia’s stock price to as $80 billion late last year, though the California company’s stock has fallen since.
A Nvidia spokesperson in January, as questions over the future of the deal increased, said the company believed the acquisition “provides an opportunity to accelerate Arm and boost competition and innovation.”
The Financial Times was the first to report https://on.ft.com/3HyXBWA that Softbank’s Arm-Nvidia deal had collapsed.
The Japanese investment giant would receive a break-up fee of up to $1.25 billion, FT quoted one of the people as saying.
(Reporting by Anirudh Saligrama in Bengaluru and Jane Lanhee Lee in Oakland, California; Editing by Sherry Jacob-Phillips, Muralikumar Anantharaman and Gerry Doyle)
Source: One America News Network
