NVIDIA (NVDA) Working to Abandon $40 Billion Arm Takeover - Bloomberg

January 25, 2022 6:17 AM EST

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Nvidia (NASDAQ: NVDA) is “quietly” preparing to abandon its takeover of Arm after the tech giant barely made any progress in obtaining approval for the $40 billion acquisition, according to the report by Bloomberg, citing sources familiar with the matter. Nvidia is not being optimistic about closing the deal, the report adds. Softbank Group (OTC: SFTBY), the owner of Arm, is reportedly making preparations for Arm’s initial public offering (IPO) as the deal with Nvidia is unlikely to happen.

If the deal goes through, the takeover of Arm would be the largest semiconductor transaction ever. Quickly after its announcement in September 2020, regulators and the chip industry voiced their criticism regarding the deal, while the U.S. Federal Trade Commission (FTC) sued to stop the takeover in December, arguing Nvidia would gain too much power in the market if it owned Arm’s chip designs.

Regulators in China are also opposing the deal and are likely to block the deal if it wins approval in other regions, said one of the sources.

Even though the deal is currently looking unlikely, no final decisions have been made yet. Nvidia and Arm continue their talks with regulators about the deal, with both companies remaining publicly committed to the deal.

“We continue to hold the views expressed in detail in our latest regulatory filings -- that this transaction provides an opportunity to accelerate Arm and boost competition and innovation,” Bob Sherbin, Nvidia spokesman, told Bloomberg.

“We remain hopeful that the transaction will be approved,” a SoftBank spokesperson commented.

Nvidia is already the biggest U.S. company in the chip industry, with a market cap of nearly $585 billion. Closing the deal with Arm would mark another significant triumph for the semiconductor giant.

Multiple tech giants including Microsoft, Amazon, Intel, and Qualcomm are opposing the deal, and have provided global regulators with information that they believe is enough to block the deal.

By Senad Karaahmetovic | [email protected]

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