Nvidia acquires ARM from SoftBank for $40 billion

Nvidia to buy chipmaker from SoftBank

The contract announced Sunday will be financed by a mix of cash and stocks, the companies said in a joint statement.

The move will allow Nvidia (NVDA) To become an industry leader in more connected devices, including smartphones, PCs, robotics, and 5G-making graphics processors primarily for computer games and autonomous vehicles-writes CEO Jensen Huang: letter Sunday to the staff.
ARM Apple (AAPL) And other major smartphone manufacturers. The company is headquartered in Cambridge and is known as one of the UK’s most successful technology companies.

NVIDIA announced Sunday that it plans to maintain Arm’s headquarters in Cambridge and expand the campus with new research facilities.

“ARM’s business model is great. We maintain our open licensing model and customer neutrality to serve customers in all industries and [intellectual property] License portfolio,” wrote Huang.

The deal is likely to be subject to considerable scrutiny in the UK, where some politicians are concerned about retaining jobs in ARM. Nvidia’s competitors buying chip designs from ARM are also likely to object.

The prime minister’s official spokesman said Monday that the British government would not hesitate to investigate acquisitions that could have a significant impact on the UK.

Sale of another SoftBank asset

Deal 4 years after SoftBank Acquired ARM for $32 billion, At the time, Japanese companies recorded the largest overseas acquisitions.
SoftBank has been working to sell assets in recent months to help large corporations raise cash in response to the coronavirus pandemic. In March, the following plans were announced: Sell ​​41 billion dollars Asset value, and last month Doubled Partial sale of shares of Japanese mobile operator
Tokyo’s Softbank shares rose close to 9% on Monday following the news. that much Financial Times It also reported on Monday that Softbank is rethinking its plans to privatize the company. Softbank declined to comment on this report.

“This combination will boost SoftBank’s share price in Tokyo,” said Jeffrey Halley, Senior Market Analyst for Oanda’s Asia Pacific region, to clients.

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If the ARM deal is concluded, it will become the largest deal in the history of the semiconductor industry, overtaking Avago’s deal. Acquisition of Broadcom According to Dealogic in 2015

Under the contract, Nvidia will pay about $12 billion in cash and $21.5 billion in shares. SoftBank will receive less than 10% stake in Nvidia, and Japanese companies can receive payouts of up to $5 billion if ARM meets “specific financial performance targets”. The company did not disclose its goals.

This deal is expected to close within 18 months. First, it must pass regulatory approvals from the UK, the European Union, the US and China.

— Luke McGee and Charles Riley contributed to this report.

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