Nvidia's buyout of Arm collapses due to regulator concerns

Asian Tech Press (Feb 8) -- U.S. chipmaker Nvidia Corp.'s buyout of British chip designer Arm Ltd. from Japan's SoftBank Group reportedly collapsed due to serious concerns from regulators.

SoftBank's $66 billion sale of Arm to Nvidia failed on Monday after regulators in the U.S., U.K. and European Union expressed serious concerns about its impact on competition in the global semiconductor industry, the Financial Times reported, citing three people familiar with the matter.

The deal, the largest ever in the chip industry, would have given Nvidia control of a company that holds the core of most of the world's mobile devices, the report noted. Large technology companies, including Qualcomm and Microsoft, which rely on Arm's chip designs, had opposed the acquisition.

A person familiar with the matter said SoftBank would receive up to $1.25 billion in compensation fees and seek to prepare Arm's initial public offering by the end of the year.

The failure will lead to a dramatic change in Arm's management, with CEO Simon Segars to be replaced by Rene Haas, head of the company's intellectual property division, the person familiar with the matter added.

And the collapse of the deal deprives SoftBank of what would have been a huge windfall due to the rise in Nvidia's share price. The cash-and-stock deal was valued at $40 billion when announced in September 2020. But as Nvidia shares took off, the value hit a peak of $87 billion last November.

Back in late January, news broke that Nvidia was preparing to abandon its acquisition of chip design firm Arm from SoftBank.

While there are no details about Arm's potential IPO, Bloomberg reported Tuesday that "the IPO is expected to happen in the fiscal year ending March 2023."

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