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ARM Deal Failed: Nvidia preparing for $40 billion deal Failure

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Behind the scenes of the ARM acquisition, chipmaker Nvidia is said to have already come to terms with the fact that the $40 billion deal will fail. Media reports indicate that global competition authorities will not approve the purchase. As early as September 2020, Nvidia announced its planned acquisition of the microprocessor group ARM, known for its chip architecture, with a bang.

Japan’s SoftBank Group wanted to sell its shares to Nvidia for $40 billion, which could have continued to grow in artificial intelligence with the deal. Like the branch service, Bloomberg announced today that Nvidia is currently preparing for the failure of the acquisition.

Deal blocked by authorities globally

Nvidia had to deal with, among other things, stumbling blocks from the regulators. The reason for this is the assumption that the chipmaker would turn the ARM business upside down in such a way that new technologies could be withheld from current partners. Both companies deny the allegations.

The US Federal Trade Commission (FTC) has been trying to prevent the deal with legal action since December. The Chinese and British authorities have also expressed their concerns in advance. For Nvidia, the failure of the ARM acquisition could turn out to be a multi-billion dollar deal.

Of the takeover agreement with the SoftBank Group, a clause is emerging that stipulates that the deal must be confirmed by the antitrust authorities by September 2022. If Nvidia doesn’t make it to authorities by then, SoftBank may or will withhold the $1.25 billion deposit, which is about half of its quarterly profit (fiscal Q3/2022).

Mark Goodman

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