Softbank cancels the sale of ARM to Nvidia, key in the chip sector
Japanese tech conglomerate Softbank has announced the termination of its deal with US firm Nvidia to sell it chip and software development firm Arm Limited, following objections from competitors and regulators. Both companies thus canceled the agreement that they had reached in 2020 their agreement for the transaction, valued at nearly 40,000 million dollars distributed in cash and in the transfer of Nvidia shares, among other assets.
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This decision is due to "significant regulatory challenges" that have prevented the transaction from being completed, Softbank explained in a statement. The founder and CEO of the Japanese technology giant, Masayoshi Son, explained this Tuesday at a press conference that the sale has not gone ahead "due to the opposition of some governments and other large technology players."
The executive defended the failed project by stating that Nvidia and Arm "have completely different businesses", and pointed out that the competing companies that opposed the operation did so "because they all indirectly use Arm products". The competition regulatory bodies in the European Union, the United Kingdom and the United States had opened investigations into the possible impact on the global semiconductor market of this operation, which was also opposed by the microchip manufacturer Qualcomm and the giant Microsoft computer.
In the United Kingdom, where Arm is based, the investigation by regulators included considerations about the strategic value for national security of this chipmaker, which has a lot of weight in the design and manufacture of this type of component for smartphones and other devices. products. Apple is one of its main clients. The sector is going through a shortage crisis that, according to the European Central Bank, could be extended until 2023.
Multiple sources in the European technology sector have suggested that it would be an interesting move for the EU to try to buy back ARM, perhaps with an association of large companies in the sector. Brussels is preparing a new regulation for chips and an aid package to promote the development of European industrial sovereignty in this field, but the movement to buy back ARM has not come to fruition.
Softbank's plans for ARM are for the company to go public in the next twelve months. In addition, ARM will receive $1.25 billion in compensation from Nvidia after the acquisition process has failed.
The announcement about the termination of the agreement comes on the same day that the Japanese technology group presented its financial results for April-December last year, a period in which its net profit fell by 87.1% to 362.62 billion yen (3,400 millions of dollars).
