FILE PHOTO: The logo of technology company Nvidia is seen at its headquarters in Santa Clara, California February 11, 2015. REUTERS/Robert Galbraith
December 2, 2021
By Stephen Nellis and David Shepardson
SAN FRANCISCO/WASHINGTON (Reuters) -The U.S. Federal Trade Commission on Thursday sued to block U.S. chip supplier Nvidia Corp’s planned $75 billion acquisition of British chip design provider Arm.
The FTC said the proposed vertical deal would give one of the largest chip companies control over computing technology and designs that competitors rely on to develop their own competing chips.
Arm, Britain’s most important tech company, which was sold to Japan’s SoftBank in 2016, licenses its blueprints to major chipmakers such as Apple Inc, Qualcomm Inc and Samsung Electronics Co Ltd , underpinning the global smartphone ecosystem.
Nvidia said “as we move into this next step in the FTC process, we will continue to work to demonstrate that this transaction will benefit the industry and promote competition.”
Arm declined to comment.
The deal has been widely expected to fall apart after facing opposition in the chip industry. British regulators said last month they would launch an in-depth probe of the deal, and it is also under scrutiny in the European Union. Nvidia shares, however, remained mostly unchanged by the news on Thursday as investors have focused on its growing data center business.
The FTC alleged “the proposed merger would give Nvidia the ability and incentive to use its control of this technology to undermine its competitors, reducing competition and ultimately resulting in reduced product quality, reduced innovation, higher prices, and less choice, harming the millions of Americans who benefit from Arm-based products.”
The FTC added the combined firm “would have the means and incentive to stifle innovative next-generation technologies, including those used to run datacenters and driver-assistance systems in cars.”
The U.S. company agreed to buy ARM from Softbank in September 2020, triggering a backlash from politicians, rivals and customers.
The FTC said it has cooperated closely with staff of the competition agencies in the European Union, United Kingdom, Japan, and South Korea.
(Reporting by Stephen Nellis in San Francisco, David Shepardson in Washington and Kanishka Singh in BengaluruEditing by Rosalba O’Brien and Matthew Lewis)
Source: One America News Network
