Back in 2020 Nvidia announced plans to acquire Arm for as much as $40 billion but today those acquisition plans have been scuppered.
Following rumours that the acquisition was off, Softbank has officially announced as much in a letter to shareholders.
“Nvidia and SBG (Softbank Group) have agreed to terminate the Agreement on February 8, 2022 because of significant regulatory challenges preventing the consummation of the transaction, despite good faith efforts by the parties,” reads the letter.
Those challenges include the Federal Trade Commission suing to block the deal as well as the UK and EU regulators voicing concerns about the acquisition.
This has proved to be a rather costly exercise for Nvidia which had to pay a deposit of $1.25 billion. This deposit, Softbank says, will be recorded as profit for the fourth quarter of the financial year ending March 2022.
As for SoftBank, it has said that it will be launching a public offering of Arm during the next financial year. This could prove important for SoftBank as the company has suffered numerous set backs of late.
Following aggressive investments in Didi and DoorDash, the value of those holdings fell according to a Bloomberg report. In addition, there are upsets internally with chief operating officer Marcelo Claure departing over a clash regarding compensation with founder Masayoshi Son.
As for Nvidia, founder and chief executive Jensen Huang said that it would continue to work with Arm as a licensee in future.
“Arm is at the center of the important dynamics in computing. Though we won’t be one company, we will partner closely with Arm. The significant investments that Masa has made have positioned Arm to expand the reach of the Arm CPU beyond client computing to supercomputing, cloud, AI and robotics. I expect Arm to be the most important CPU architecture of the next decade,” Huang said in a press release.
Nvidia will also retain its 20-year license deal with Arm.
This news has us wondering about another big ticket acquisition – Microsoft’s purchase of Activision Blizzard. That deal is still subject to regulatory approval and given the size of the deal and the scope of what Microsoft is purchasing, we suspect regulators will have concerns to voice.
