SoftBank’s $66 billion sale of chip group Arm to Nvidia collapses
Qualcomm and Microsoft objected; scrutiny came from U.S, U.K and EU regulators
SoftBank’s $66 billion sale of UK-based chip business Arm to Nvidia collapsed on Monday after regulators in the US, UK and EU raised serious concerns about its effects on competition in the global semiconductor industry, according to three people with direct knowledge of the transaction.
The deal, the largest ever in the chip sector, would have given California-based Nvidia control of a company that makes technology at the heart of most of the world’s mobile devices. A handful of big tech companies that rely on Arm’s chip designs, including Qualcomm and Microsoft, had objected to the purchase.
SoftBank will receive a break-up fee of up to $1.25bn and is seeking to unload Arm through an initial public offering before the end of the year, according to one of the people.
The failure is set to result in a management upheaval at Arm, with chief executive Simon Segars being replaced by Rene Haas, head of the company’s intellectual property unit, the person added.
The collapse of the deal robs SoftBank of a big windfall it would have earned thanks to a boom in Nvidia’s stock price.
The cash-and-stock transaction was worth up to $38.5bn when it was announced in September 2020. But the value soared as Nvidia’s shares took off, reaching a peak value of $87bn last November before the tech stock reversal.