Nvidia acquires ARM for $40 billion
ARM is a chip design company founded in the UK. The company’s main business is to authorize chip design patents, design technologies, and solutions.
Many years ago, Masayoshi Son announced the acquisition of ARM and merged it into the SoftBank Group as a subsidiary, but Masayoshi Son and SoftBank Group are currently failing in investment.
This is also true of Masayoshi Son’s announcement of the sale of ARM. The final buyer is the chip industry giant Nvidia, with a record-breaking transaction price of US$40 billion.
After the completion of the transaction, the ARM will become a subsidiary of Nvidia Group. Of course, this still needs to wait for the regulatory approvals of the major global markets.
Nvidia’s acquisition of ARM has actually aroused criticism from many parties, including some parties in the UK that strongly opposed the transaction and feared that it would affect the interests of the UK.
More industry companies worry that Nvidia’s acquisition of ARM will affect chip design patents and technology licensing.
Japan’s SoftBank did not have these problems when it acquired ARM, because SoftBank Group’s acquisition of ARM was purely an investment, and SoftBank did not make chips and therefore did not compete with customers.
Nvidia is doing chips to make more industry companies worry that Nvidia will compete with industry companies after the acquisition, which will affect the interests of the chip industry and even hinder development.
This is also true. Although Nvidia has reached an agreement with SoftBank, it will eventually have to wait for the approval. If it cannot be approved smoothly, it may affect the transaction.
SoftBank Group acquired ARM for US$31.4 billion in 2016, and now the US$40 billion deal is still a good return on investment for SoftBank Group.
Of course, Nvidia’s strong capital is indeed generous, and Nvidia acquired $21.5 billion in stocks and $12 billion in cash plus a margin of $2 billion.
If ARM can complete certain performance goals after the transaction is completed, SoftBank may also receive up to $5 billion in Nvidia stock or cash awards.
After completing the target, ARM employees can also receive huge rewards. Nvidia plans to provide an additional $1.5 billion in rewards after ARM completes the performance target.