Europe set to examine Nvidia-ARM deal

February 08, 2021 // By Peter Clarke
Europe set to examine Nvidia-ARM deal
The European Union is set to follow the UK in launching a competition investigation into Nvidia's proposed acquisition of ARM for $40 billion.

The deal warrants "serious scrutiny" officials in Brussels are reported to have said in a Financial Times report. The deal is also expected to be investigated by US and Chinese authorities.

Graphics chip vendor Nvidia Corp. agreed to buy intellectual property licensor ARM from Japan's SoftBank Group in summer 2020, subject to regulatory approval (see ARM sale to Nvidia agreed at $40 billion ). If successfully concluded, the deal would be the biggest M&A in the history of the semiconductor sector.

Meanwhile the deadline for initial objections, set by the UK's Competitions and Market Authority (CMA) has passed. Reportedly UK AI processor startup Graphcore Ltd. has opposed the deal in a submission.

The CMA's remit is to look into whether, once owned by Nvidia, ARM would have any incentive to raise prices, lower quality or withdraw IP licensing and whether that would ultimately hit UK consumers. Nvidia said at the time it launched the bid that it would preserve the open ARM licensing business model and even use the channel to make Nvidia technology available for license.

Although antitrust authorities around the world are expected to examine M&As on the basis of competition merits there is the possibility that political considerations may also lend weight to different arguments. In the years since SoftBank Group's acquisition of ARM the understanding of the strategic value of domestic autonomy in electronics, semiconductors, communications and artificial intelligence has grown amongst politicians.

Related links and articles:

UK authorities launch probe into Nvidia-ARM deal

ARM's China struggle threatens $40bn Nvidia deal

China likely to block Nvidia-ARM deal, says ex-Lenovo exec

Opinion: Nvidia's bad deal is not yet done

ARM sale to Nvidia agreed at $40 billion


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