Nvidia’ Mega-Acquisition of ARM is Stalled with More than Billion Dollars at Stake
Kress also confirmed that Nvidia is dealing with regulatory issues in the US, China, the EU, and the UK. She said, “We are continuing, working with the U.S., U.K., EU and China,” she said, “each of the four major jurisdictions.”
On 19th August 2021, it was reported that mega-merger between Nvidia Corp. and ARM Holdings LLC is not expected to happen within the timeframe expected by Nvidia, however, Nvidia is looking to wrap up the merger in the next year.
On Wednesday, Nvidia Chief Financial Officer Colette Kress announced another quarter of record profit and sales while commenting on the USD 40 billion acquisition of ARM Holdings LLC, that has many critics in semiconductor industry.
In May 2021, Colette Kress said that Nvidia is “on track to close the transaction within the original timeframe of early 2022.” However, on 18th August, Kress said that “discussions with regulators are taking longer than initially thought.”
Nvidia Chief Financial Officer Colette Kress said, “The overall regulatory process is probably taking a little bit longer than anticipated. We believe the regulators will see the value, the benefits of this deal, to the benefit of this industry, but we don’t have a specific date on when we think this will close.”
Kress further pointed out that the mega-merger has to be completed before September 2022, otherwise Softbank Group Inc., ARM’s current owner, gets to keep USD 1.25 billion breakup fee that Nvidia already made as a down payment. Nvidia has more than a year to wrap up the deal and save more than a billion dollars. An additional USD 750 million in licensing fees were paid directly to ARM.
Kress discussed about the breakup fee and said, “We will deal with the issue in September 2022 if we have not reached regulatory approval, but right now we are confident that the regulators will see the benefit of the deal.”
It was reported earlier this month that the UK regulators were considering blocking the deal for England-based ARM Holdings LLC due to major concerns about the national security. Kress also confirmed that Nvidia is dealing with regulatory issues in the US, China, the EU, and the UK. She said, “We are continuing, working with the U.S., U.K., EU and China,” she said, “each of the four major jurisdictions.”
The merger of Nvidia and ARM would add to Nvidia’s fast-growing products a microprocessor designer that licenses its chip designs and company would be directly competing with Intel Corp., and Advanced Micro Devices Inc. (AMD) in the data-center/server market.