There has been a lot of debate over the weekend which centers around Microsoft buying Nvidia. While neither firm has confirmed or denied the claims it is worth looking into the ramifications of such a takeover.
Microsoft have apparently a deal in place with Nvidia which gives them the exclusive right to equal any offers by third parties for 30 percent or more of Nvidia’s outstanding shares. This deal will prevent any other company from acquiring Nvidia.
Nvidia said in a Securities and Exchange Commission filing dated May 27th “Under the agreement, if an individual or corporation makes an offer to purchase shares equal to or greater than 30% of the outstanding shares of our common stock, Microsoft may have first and last rights of refusal to purchase the stock.”
Is it a good move from Microsoft? With Nvidia’s focus on the tablet component market it would be a benefit for Microsoft to have direct access to the hardware, speeding up and enhancing their future product development.
Apple were also interested in buying Nvidia in the past although this recent deal with Microsoft would stop Apple from taking over Nvidia down the line. If Microsoft wanted to get 30% of the company, it would cost them $3.4 billion – not a problem for the operating system giant. While no immediate plans have been talked about, it appears that the clause in place means that Microsoft could step in and take control of Nvidia, as well as their supply chain.
KitGuru says: A good move for Microsoft? On paper it would seem strong for the mobile market.