The sale of smartphone chip designer Arm to US computer chip giant NVIDIA Corporation (NASDAQ:NVDA) has fallen through.
The proposed deal, which would have seen the US firm pay around US$66bn for a company that Japanese investment group SoftBank paid just US$32bn just six years ago, ran into regulatory hurdles.
A statement from SoftBank said both parties had agreed to bin the transaction. SoftBank will get to keep the US$1.25bn deposit it received when the deal was first agreed as this was non-returnable.
The collapse of the deal means it is back to Plan A for SoftBank, which means floating the company on a stock exchange as an independent entity. SoftBank said the initial public offering would take place before the end of March 2023.
“Arm’s processor technology is the world’s most widely licensed and deployed semiconductor design of its kind and is used in virtually all smartphones, the majority of tablets and digital TVs, and a significant proportion of all chips with embedded processors. Since being acquired by SBG in 2016 Arm has increased investment in R&D, expanding its product portfolio and addressable markets, and is now gaining share in fast growing markets such as AI, IoT, cloud, autonomous driving, and the Metaverse. This has resulted in Arm’s revenues and profits growing strongly over the past two years and provides a foundation for future growth,” SoftBank’s statement said.
Yeah; they have to pay a 1.25 Billion USD penalty to ARM for not completing the deal…
— Nick Kusters (@NKCSS) February 8, 2022
It was that increased use of Arm technology in devices beyond the world of smartphones that appears to have done for the deal, with regulators concerned that combining Arm’s intellectual property with that of Nvidia would create a group with an overly dominant market position.
Arm, just about the only technology giant Britain has produced in the last 50 years, said industry veteran Rene Haas has been appointed as chief executive officer of the company with immediate effect.
Haas has been with Arm since 2013; ironically, before that, he spent seven years at NVIDIA.