NVIDIA announced the acquisition of Arm in September 2020. The deal was initially scheduled to be completed in 18 months. The company expected to close the deal in March 2022. However, regulatory oversight has prevented this. To date, the governments of China, the United States, and the United Kingdom have confirmed that they will investigate the deal. “Our discussions with regulators are taking longer than initially thought, so it’s pushing out the timetable,” CEO of NVIDIA Jensen Huang told the Financial Times. Huang hopes that the authorities “recognize the benefits of the acquisition.” For acquiring Arm, NVIDIA has an agreement with the Japanese multinational holding SoftBank, which is valid until the end of 2022. If NVIDIA fails to finalize the deal before this date, it is a threat to its credibility. However, Yoshimitsu Goto, SoftBank’s chief financial officer, is optimistic about the deal and believes that NVIDIA can acquire Arm within the timeframe.
Governments’ sensitivity to semiconductors has prevented the contract from being finalized
NVIDIA’s efforts to acquire Arm have sensitized the governments of China, the United States, and the United Kingdom. All of these governments have said they want to scrutinize the deal. Dates back to April, the U.K. government ordered an investigation into the deal. Also, the government wants to examine the national security public interests to declare its agreement with the deal. In the U.S., Google, Microsoft, and Qualcomm have said the deal could hurt market competition. For this reason, the U.S. Federal Trade Commission also said it wanted to oversee the deal. The China antitrust regulatory also is taking the same path. Of course, the deal also has well-known opponents, perhaps the founder of Arm being the most famous and controversial. Hermann Hauser called the deal ‘an absolute disaster for both the U.K. and Europe. NVIDIA insists on doing the deal because it will become the absolute king of mobile chips by acquiring Arm. Hauser believes that NVIDIA can ruin the Arm business model to dominate its domestic rivals.
