UK regulator investigating Nvidia's $40 billion acquisition of Arm

midian182

Posts: 6,317   +53
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What just happened? Nvidia’s $40 billion acquisition of Arm was always going to come under scrutiny from regulators, given its size and effects on the industry. Now, the UK’s competition watchdog has launched an investigation into the takeover, which is set to become the second-largest tech deal in history.

In September, Arm owner Softbank confirmed it had reached an agreement with Nvidia to sell off Arm Limited for $40 billion.

Softbank paid $31 billion for Arm in 2016. Four years later, with the Japanese conglomerate offloading assets to help lessen the impact of the Coronavirus-related economic downturn, it began looking for buyers interested in Arm. Nvidia stepped up, agreeing to purchase the company's lucrative IP assets and business.

Largest tech deals in history:

Company Acquisition Price Year
Dell EMC $64 billion 2015
Avago Technologies Broadcom $37 billion 2015
IBM Red Hat $34 billion 2018
Softbank ARM Holdings $31.4 billion 2016
Microsoft LinkedIn $26.2 billion 2016

The acquisition has drawn the Competition and Markets Authority’s (CMA) attention. It has requested interested third parties submit their views on the deal before a formal investigation is launched later this year.

The CMA says it will work with other competition authorities worldwide to consider the impact of the deal. The agency said its primary concern is to ensure the takeover doesn’t result in consumers facing inferior or lower-quality products.

“The chip technology industry is worth billions and critical to many of the products that we use most in our everyday lives,” said CMA chief executive Andrea Coscelli in a statement.

If the investigation reveals that the deal breaks UK competition rules, the CMA can block it.

Last August, before Nvidia had made a formal bid, Arm co-founder Hermann Hauser warned that such a move would be a disaster. “If it becomes part of Nvidia, most of the licensees are competitors of Nvidia, and will of course then look for an alternative to Arm,” he said at the time, adding that the company’s decisions would no longer be made in Cambridge, UK, but at Nvidia’s California headquarters.

Hauser believes Nvidia's takeover would likely cost some of Arm’s 3,000 UK employees their jobs while creating a monopolistic behemoth on the same scale as Facebook and Google.

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Farkinell

Posts: 72   +88
The UK regulators (plural) have a very light touch so I’d be surprised if they step in to prevent this deal, especially if Nvidia make some vague and non-binding promises about retaining jobs for a indeterminate time.

We are very good at selling the family silver in this country, everything is up for grabs and with a government that has never said no to a stuffed brown envelope it’s not looking good for the fine and talented people at ARM.
 
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R00sT3R

Posts: 351   +872
We are very good at selling the family silver in this country, everything is up for grabs and with a government that has never said no to a stuffed brown envelope it’s not looking good for the fine and talented people at ARM.
You need to pay attention to legislation thats going through Parliament, on the business of foreign takeovers of UK companies.

The 'free for all' days are over.
 

Makste

Posts: 117   +59
I think that, generally, this is where good corporate behavior can pay off. With knowledge of Nvidia's past, so many people are paying close attention.

Notice how few if any, are actually paying attention to AMD's purchase of Xilinx.
 
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NeoMorpheus

Posts: 91   +179
Given how "nice and sweet" Nvidia has been to their partners, customers and the industry overall, there is no doubt that they dont have any malicious intentions with this purchase.

They love everyone so much, that they will sacrifice 40 US$ billions, to collect a meager couple of billions a year to pay off for this acquisition in 20 plus years, to benefit all of mankind.

/s in case that is needed, even though, the rabid corporation/brand followers will actually believe everything I said above.
 
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Lounds

Posts: 667   +569
The UK regulators (plural) have a very light touch so I’d be surprised if they step in to prevent this deal, especially if Nvidia make some vague and non-binding promises about retaining jobs for a indeterminate time.

We are very good at selling the family silver in this country, everything is up for grabs and with a government that has never said no to a stuffed brown envelope it’s not looking good for the fine and talented people at ARM.
Tbf most buyouts usually come with some cavite such as protecting UK Jobs for X number of years. I just wished there were more taxable punishments for moving a business out of the UK.
 

Avenger001

Posts: 62   +47
Do you really want this owned by an American company? Do people really think big tech oligopolies are a good thing for society?
 

Porkous

Posts: 122   +36
Sounds like a strange deal. ARM is in billions of chips, while Nvidia is in a few less.
If you look at the chip itself, you realize how many doors it has open to the world, how many apps rely on it. If you look at NVidia, you see that it is mostly a GPU company, and Arm already has a GPU for itself and others.
ARM seems much bigger and more powerful/influential company to the world.

Would ARM lean to American internal politics, and Nvidia's closed system?

How would this deal benefit gamers?
 
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