Back in 2020, Nvidia set out on a mission to complete the largest deal in semiconductor history by acquiring ARM for $40 billion. While there have been regulatory hurdles in the way, Nvidia expressed confidence that the deal would be approved throughout 2021, but now as we enter 2022, that confidence has reportedly waned.
Speaking with Bloomberg recently, sources familiar with the matter have claimed that Nvidia has begun warning partners that it no longer expects the acquisition of Arm to complete. SoftBank, the company that currently owns Arm, has also apparently begun preparations to launch an IPO and turn Arm into a publicly traded company should the Nvidia deal fall through.
Currently, Nvidia is facing a legal battle with the FTC in the US over the deal, and regulators in the UK, EU and China are also investigating and could intervene. Originally, Nvidia expected the transaction to close within 18 months of announcement, which would mean the deal would have to close sometime this quarter. However, with ongoing regulatory hurdles still in the way, this is unlikely to happen and the deal could run over its initial two-year deadline to complete.
If the deal does fall apart, then SoftBank and Arm will still walk away with several billion dollars, as the deal included a $2 billion pay-out upon signing and an additional $1.25 billion fee should the deal collapse.
In statements, both SoftBank and Nvidia have expressed hope that the deal will eventually complete as planned.
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KitGuru Says: Do you think the Nvidia-Arm deal will end up being approved, or do you think it is more likely to be dropped at this point?