Nvidia is indeed going to buy ARM, at least according to the latest from the takeover grapevine, following rumors earlier this year that this was the case.
Going by a report in the Financial Times, Nvidia is to acquire ARM and will pay $40 billion to SoftBank for the privilege. Current owner SoftBank purchased ARM in 2016 for $32 billion, but now has to take action to raise funds in difficult times (with a combination of financial headwinds negatively affecting SoftBank including coronavirus).
It was thought that SoftBank might take the IPO route with ARM, but it now seems that a full sale is imminent, at least if the Financial Times is correct – and the FT sounds pretty confident in its assertion that the sale could be announced as soon as Monday.
The FT claims that ‘multiple people with direct knowledge’ of the matter have said the takeover is happening, and it’ll be a cash and stock deal which will leave SoftBank as the largest shareholder in Nvidia.
Of course, we still need to be careful with any rumor, as ever: particularly around something which will make such big waves in the tech industry. As we’ve discussed before, many believe that regulatory roadblocks could stop any such acquisition – and that could still potentially be the case. This was one of the reasons Apple reportedly decided against attempting to make a deal for ARM, as well as the fact that ARM’s licensing model wouldn’t really fit the way Tim Cook’s company works.
Indeed, the same applies to Nvidia, some folks have argued, and as we’ve reported before, analyst Geoff Blaber from CCS Insight has previously observed that: “In reality, ARM is a licensing business. Although [a buyout] could put Nvidia in a powerful position of control, some $35 billion [the rumored price at the time] would be a steep price to pay, and licensing alone offers little synergy. Nvidia could license ARM technology and build its own CPU cores, or partner to do so without acquiring ARM.”
Blaber has just reasserted on Twitter that an Nvidia acquisition would be damaging and there are still ‘big question marks’ around that thorny issue of regulatory approval for the move.
We maintain the view that an acquisition by NVidia would be extremely damaging long-term for Arm and its partners. Big question marks on whether it would gain regulatory approval. See here https://t.co/qHfQTEeXBl https://t.co/wXNqyYs0MwSeptember 12, 2020
Via PC Gamer
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