SoftBank Group’s sale of ARM to US chip maker Nvidia has collapsed, a source familiar with the matter said, adding that ARM would plan for an IPO instead of the sale, which would have been worth as much as US$80-billion.
The deal, announced in 2020, has faced several regulatory hurdles. The US Federal Trade Commission sued to block it in December, arguing that competition in the nascent markets for chips in self-driving cars and a new category of networking chips could be hurt if Nvidia carried out the purchase.
The buyout is also under the scrutiny of British and EU regulators amid concerns that it could push up prices and reduce choice and innovation.
It also had yet to receive approval from anti-monopoly regulators in China, which have withheld approval of cross-border chip acquisitions that other countries have green-lighted.
The deal’s collapse could also affect a legal dispute between ARM’s China joint venture and Allen Wu, the joint venture’s original CEO.
Nvidia has become the most valuable US chip company on the strength of its graphic processor chips. Although still seen as crucial for gaming, graphic processors have become much more widely used for artificial intelligence and other advanced fields.
The sale would have marked an early exit from ARM for Softbank, which acquired it for $32-billion. CEO Masayoshi Son has lauded the potential of ARM, but is slashing his stakes in major assets to raise cash.
An ARM acquisition would have put Nvidia into even more intense competition with rivals in the data centre chip market such as Intel and AMD.
ARM licenses its architecture and technology to customers such as Qualcomm, Apple and Samsung Electronics that design chips for devices from mobile phones to computers.
Nvidia and SoftBank declined to comment. ARM did not immediately respond to a request for comment. ARM China declined to comment.
The value of the deal, which depended on Nvidia’s stock price, was originally pegged at about $40-billion and rose with Nvidia’s stock price to as much as $80-billion late last year, though the California company’s stock has fallen since.
A Nvidia spokesman in January, as questions over the future of the deal increased, said the company believed the acquisition “provides an opportunity to accelerate ARM and boost competition and innovation”. — Anirudh Saligrama and Jane Lanhee Lee, with Josh Horwitz, (c) 2022 Reuters