Bad news for Nvidia, and although today Jensen Huang, the CEO of Nvidia, indicated in an interview that he was confident that the acquisition of ARM will be finalized this year, a few hours after making a said statement, the United Kingdom Government has ruled indicating that if this acquisition is made it would imply a national security risk for the country .
I am confident that regulators will see the success of the transaction. It will provide a wave of innovation. It will create new options for the market. It will allow ARM to expand into markets that are otherwise difficult to reach on its own." said Jensen Huang, CEO of Nvidia.
Like many of the partnerships I announced, they are all things that bring AI to the ARM ecosystem, that brings Nvidia's accelerated computing platform to the ARM ecosystem - it's something that just us and a group of computing companies working together we can do-. The regulators will see the success of this, and our conversations with them are expected and constructive. I am sure that we will still manage to close the agreement in 2022, which is when we expected it at the beginning, about 18 months.
Following this statement, the United Kingdom Government launched a proposal stating that it is in the public interest to intervene in the acquisition of ARM by Nvidia alleging a national security problem, although as expected, they did not indicate what security problem Domestic would mean Nvidia buying from a company that designs chips in the UK but is owned by the Japanese company SoftBank. We will have to wait to see what all this ends up with.
"On September 13, 2020, Nvidia Corporation (Nvidia) and SoftBank Group (SoftBank) announced an agreement whereby Nvidia will acquire ARM Limited (ARM) from SoftBank in a transaction valued at approximately $ 40 billion.
Under the terms of the transaction, which has been approved by the boards of directors of Nvidia, SoftBank, and ARM, upon closing, Nvidia will pay SoftBank a total amount of $ 12 billion in cash and $ 21.5 billion in shares. from Nvidia. Additionally, SoftBank may receive up to $ 5 billion as long as ARM meets certain financial performance targets. Nvidia will also issue $ 1.5 billion in stock to ARM employees.
Under the powers established in the 2002 Business Law, the Secretary of State for Digital Affairs, Culture, Media, and Sports can intervene for reasons of national security. This competence is exercised on a quasi-judicial basis.
On April 19, 2021, the Secretary of State issued a Public Interest Intervention Notice (PIIN), confirming that he is involved in the sale for national security reasons. In reaching this decision, it took into account advice received from officials across the investment security community.
The Competition and Markets Authority (CMA) will prepare a report on the competition and national security aspects of the proposed transaction. The CMA has until midnight on July 30, 2021, to complete and submit this report to the Secretary of State."
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