NVIDIA will not buy ARM as announced to the press

NVIDIA will not buy ARM

En a statement dated yesterday in California, NVIDIA and SoftBank Group Corp. announced the termination of the agreement announced last year for NVIDIA to acquire Arm Limited (“Arm”) from SBG.

Why NVIDIA won't buy ARM

According to what was stated, the parties made the decision to abort the operation due to what they described as “important regulatory obstacles that prevent the consummation of the transaction” and, "despite the good faith efforts of the parties." Arm's future will be in a public offering of shares

For NVIDIA who spoke was Jensen Huang, founder and CEO:

Arm has a bright future and we will continue to support it as a proud licensee for decades to come.

Arm is at the center of the important dynamics of computing. Although we will not be a single company, we will partner closely with Arm. The significant investments Masa has made have positioned Arm to extend the reach of the Arm CPU beyond client computing to supercomputing, cloud, AI and robotics. I expect Arm to be the most important CPU architecture of the next decade

SBG, holder of 25% of the firm's shares, will begin preparations for an Arm public offering within the fiscal year ending March 31, 2023. The entity believes that Arm's technology and intellectual property will continue to be key in mobile computing and the development of artificial intelligence.

Masayoshi Son, Representative Director, Corporate Director, President and CEO of SoftBank Group Corp.

Arm is becoming a center of innovation not only in the mobile revolution, but also in cloud computing, automotive, the Internet of Things and the metaverse, and has entered its second phase of growth. We will take this opportunity and start preparing for Arm's IPO, and make further progress.

I want to thank Jensen and his talented team at NVIDIA for trying to bring these two great companies together and wish them every success.

A Little History

NVIDIA and SBG had announced that they had reached a definitive agreement, under which NVIDIA would acquire Arm from SoftBank, on September 13, 2020. Under the terms of the deal, SBG would keep the $1.250 billion paid upfront by NVIDIA, and NVIDIA would hold the Arm licenses for 20 years.

The US Federal Trade Commission announced that it would go to court to block the merger as it believed the combined company could "unfairly harm Nvidia's rivals". In the UK, where Arm is based, the merger has run into similar hurdles in recent months, as well as from EU antitrust regulators.

Nvidia dominates the market for GPUs and AI accelerators and also owns the intellectual property for the chips that power virtually all smartphones and IoT devices. The two companies would have had to make changes to their agreement for it to pass the regulatory process. In doing so, the transaction would no longer be so advantageous.

other failures

NVIDIA can take comfort in the fact that it is not alone in its failure.

Last week, a $5.000 billion deal between Taiwanese GlobalWafers and German chip supplier Siltron also failed after German regulators failed to approve it.

In 2018, Qualcomm abandoned a $44.000 billion deal that would see it buy NXP Semiconductors (NXPI.O) after failing to win approval from Chinese regulators, and former US President Donald Trump blocked the Qualcomm takeover proposal. made by microchip maker Broadcom (AVGO.O).

Consequences

One of the results of the cancellation is a change of leadership at Arm. The company's current CEO, Simon Segars, stepped down from his post effective yesterday, and René Haas, chairman of Arm's IP group (and former Nvidia vice chairman and general manager of its computer products business), will take his place. place.


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