Nvidia says it will lose $1.25 billion if the ARM acquisition fails

Previously, Nvidia announced that it would spend $40 billion to acquire the chip design company ARM, but then this transaction attracted the attention of major global market regulators.

In particular, the British government is very repulsive of this acquisition of Nvidia, and the British government is very worried that the acquisition of Nvidia will not be conducive to the development of ARM and even the British technology community.

The industry is also worried that the acquisition of Nvidia will not be conducive to market competition. Nvidia may affect competition because it also develops and produces chips and is not conducive to consumers.

Nvidia founder has stated on many occasions that the relevant transaction will not affect market competition, but it can be said that in the United States such as Microsoft and Google have opposed the transaction.

Nvidia announced that it had paid $1.25 billion in advance when acquiring ARM, and this advance payment will not be refunded if the transaction fails.

After the transaction failed, ARM still belongs to the Japanese Softbank Group. At present, Nvidia seems to be exhausted by the difficulties faced by this transaction.

For example, Jensen Huang recently stated that Nvidia has the industry’s top R&D capabilities, so even if it does not acquire ARM, it will not affect Nvidia.

Nvidia also issued a warning to investors that if the regulatory authorities did not make a decision within the deadline, the advance payment paid by Nvidia would be directly in vain.

This looks like Nvidia is ready for the failure of the acquisition. Perhaps Nvidia also knows that the current regulatory situation is unlikely to allow the transaction to be concluded.

According to the agreement reached between Nvidia and Softbank Group, the transaction will be completed within one year but can be extended to two years at most, which is September 2022.

If the regulatory agency still does not make an agreed decision before this date, ARM still belongs to the SoftBank Group under the agreement to terminate the prepayment and non-refundable ARM.

At present, there is no regulatory agency in major global markets to approve the transaction, and the local regulatory agency in the UK has planned to conduct the second phase of a more stringent review.

The British government’s attitude is that it does not want Nvidia to complete the acquisition. The British government hopes that ARM can market as soon as possible so that the circulating stocks can be traded freely.

Of course, even if the British government agrees to the transaction with additional conditions, the regulatory agencies of the European Union, China, the United States, and other markets have to approve it, and it is unlikely to pass.

Via: telegraph