NVIDIA is gently preparing to abandon the takeover of Britain’s ARM. This is what we learn today from Bloomberg. The American media indicates in particular that NVIDIA would have already informed its partners that the acquisition would not take place.
Decried by many industry players, the takeover of ARM by NVIDIA could finally fall through. Announced in September 2020 for a total amount of 40 billion dollars, this acquisition project is being scrutinized very closely by the authorities, in particular by American and British regulators. After a year and a half of negotiations, the realization of this takeover now seems compromised, if we are to believe the information from Bloomberg.
A takeover too big to be true?
According to media sources, NVIDIA has already indicated to its industrial partners that it no longer expects an agreement to be reached for the purchase of ARM. For its part, the Japanese giant SoftBank, owner of ARM since 2016 (for which it had paid 31 billion dollars), is also preparing for the abandonment of the project. As an alternative, we learn in particular that SoftBank would now accelerate preparations for an IPO of ARM.
All this is of course unofficial, because publicly, the two groups are careful not to reveal their plans. ” We continue to stand by the views expressed in detail in our last press releases that this transaction provides an opportunity to grow ARM while driving competition and innovation. “, declared a spokesperson for NVIDIA, contacted by Bloomberg.
2 billion lost for NVIDIA in the event of no agreement
” We remain hopeful that the transaction will be approved “, for his part indicated a spokesman for SoftBank, joined by the media. Note also that the leaders of NVIDIA and ARM are still pleading their case with regulators. No final decision has yet been made, tempers Bloomberg.
As a reminder, when announcing the proposed takeover of ARM, NVIDIA had indicated that it would probably take 18 months for it to be finalized, and especially endorsed by the regulators. If we stick to this schedule, the takeover should therefore be definitively approved by next March… but Bloomberg describes this possibility as not being ” hardly plausible “.
For its part, the initial agreement between NVIDIA and SoftBank is due to expire on September 13, 2022, just two years after its signing. It is nevertheless renewable if necessary, if by chance, the negotiations should take more time before succeeding. An outcome that seems compromised, however.
Interestingly, if no agreement is reached for the takeover of ARM, NVIDIA would still lose 2 billion in the case: an amount paid when the preliminary agreement was signed… which SoftBank and ARM can keep. It includes in particular a severance payment alone amounting to 1.25 billion dollars, reports Bloomberg.
Sources: Bloomberg
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