NVIDIA acquisition of Arm update: UK regulators are showing a preference

NVIDIAAcquisition A.rmMore than a year has passed since the case,The four major regulatory bodies of China, the United States, the United Kingdom and EuropeThe attitude has been in a blur, and now,British sideFinally there isTendency.

In September last year, NVIDIA announced that it would spend $40 billion to acquire ARM, and NVIDIA was confident that it would pass the review quickly, but after more than a year, this matter has not made progress, and now it is stuck by the British side, and the country's regulators prefer ARM to go public rather than sell it to NVIDIA.

ARM, a chip design company that originated at the University of Cambridge in the United Kingdom, has become a leader in the global mobile processor market and is actively expanding into the desktop, notebook and data center markets, and was acquired by Japan's SoftBank in 2016, but ARM still controls the British.

Now that the British regulator has conducted a second phase of review of ARM's acquisition, the latest news is that the British opinion does not want NVIDIA to buy ARM, but wants ARM to be listed on the London exchange.

ARM company through IPO listing, which is also not acquired by NVIDIA, SoftBank announced another way, on the one hand, can solve the financing problem, on the other hand, after the listing can remain independent, which is the most acceptable choice for many countries, and the acquisition by NVIDIA is easy to trigger anti-monopoly reviews in many countries and regions.

For NVIDIA, the deadline for their acquisition of ARM is March next year, but it can be extended to September next year, that is, two years if the review is not completed, it will really fail, and NVIDIA will pay 1.25 billion US dollars in liquidated damages, about 8 billion yuan.

Jensen Huang: Still working hard, we can make ARM better

Everyone knows that ARM is successful in mobile computing, but NVIDIA can help them be more successful in other computing areas, Huang said.

However, NVIDIA also seems to know that the possibility of acquiring ARM is decreasing, and Huang said that if the acquisition fails, it will still maintain a high level in the high-performance computing field.

7month，There are signs of opposition in the UK

According to reports, people familiar with the matter said today that the British government is considering blocking Nvidia's acquisition of ARM due to potential risks to national security. The UK's antitrust authority, the Competition and Markets Authority (CMA), submitted the report in late July, people familiar with the matter said today.

The report shows that the impact of the deal on Britain's national security is worrying. As a result, the UK is currently inclined to block this acquisition. Another person familiar with the matter said Britain could launch a deeper review of the deal because of national security concerns.

Of course, people familiar with the matter also stressed that the UK government has not yet made a final decision, and it is still possible to approve the deal in the future if certain conditions are met. Whether the deal requires further scrutiny by UK regulators is up to Digital Minister Dowdon to decide.

In response, an Nvidia spokesperson said in a statement: "We will continue to work with the UK government to complete the regulatory process. We look forward to their questions and to resolving any questions they may have. ”

SoftBank could seek an initial public offering from ARM if the deal is blocked by regulators, but ARM CEO Simon Segars has previously denied the move, two people familiar with the matter said.

NVIDAAcquisition of ARMDetails of the case

ARM is at the heart of nearly every smartphone sold today, from Apple's iPhone to Samsung Galaxy devices running Google's Android software. In addition to smartphone processors, ARM technology is used in many smaller chips integrated into various computer systems and devices.

In September 2020, NVIDIA reached an agreement with SoftBank to acquire ARM from SoftBank for about $40 billion. If the deal goes through, it would be the largest semiconductor deal ever made in dollar terms, and it would create the largest chip company in the West.

For Nvidia, ARM represents an opportunity to boost its fast-growing business of selling chipsets and software to data centers. In addition, the deal will further strengthen Nvidia's position and make it harder for competitors to shake up its business.

Nvidia has previously promised to continue operating ARM as an independent subsidiary, using a "customer-neutral" and "open license" model. If these companies are willing to pay a fee, they can get a license, even if they are a direct competitor of NVIDIA.

But analysts at the time said the deal was clearly not "routine" and believed that regulators in individual countries would evaluate it. In Britain, opposition to the deal has been particularly strong.

In April, Oliver Dowden, the UK's digital minister, issued a "Public Interest Intervention Notice" confirming that he was interfering with Nvidia's acquisition of ARM.

Dowden also sent a letter to the CMA notifying the CMA of his decision and directing the CMA to begin a "phase one" investigation to evaluate the deal. The CMA needs to prepare a report by July 30 with recommendations on issues such as justice, competition and national security.

ARM co-founder Hermann Hauser said it was an absolute disaster for Cambridge, the UK and Europe. Hauser also said Nvidia will destroy ARM's business model, which involves licensing chip designs to about 500 other companies.