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Nvidia Arm purchase to be a $32bn+ cash and stock deal

by Mark Tyson on 31 July 2020, 15:11

Tags: ARM, NVIDIA (NASDAQ:NVDA)

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SoftBank has made it known it is looking for suitable investors to take Arm Holdings off its hands. As a backup plan, perhaps if the price isn't right or regulatory issues get in the way, SoftBank may float the chip design and licensing business on the public stock markets to reclaim capital from its 2016 investment.

Last week we heard a couple of things about a possible Arm sale by SoftBank; firstly Apple had ruled out bidding, and secondly Nvidia had approached Softbank as it was interested in acquiring Arm. Today we are hearing that the talks between Nvidia and SoftBank are actually in their "advanced" stages, and other sources are confirming that the deal would be for a sum greater than the US$32bn price Softbank paid back in 2016.

A Bloomberg report today asserts that talks are advanced and the two parties "aim to reach a deal in the next few weeks". It found this out from two people familiar with the matter. Nvidia is the only suitor in such discussions with SoftBank, the sources added.

Though in advanced stages talks could drag on past the above mentioned timeframe, or even be called off altogether, it must be noted. Furthermore, one must remember that there are regulatory hurdles and so on to cross - if a deal is agreed by the parties involved. It sounds like if the Nvidia deal does fall through then Arm could be placed on the stock market as early as next year.

The FT shared some more insider information from its unnamed sources a few hours ago. Specifically the possible sale price was flagged. FT sources said that the deal being hammered out valued Arm at a sum higher than the $32bn price that SoftBank paid for the business in 2016. It would be a deal offering a mix of cash and Nvidia stock, according to these insiders. Nvidia stock has climbed very nicely which wil lbenefit this from the green team's perspective - it is up 151 per cent in the last year.

When SoftBank purchased Arm in 2016 it made a number of commitments - to grow Arm's workforce and retain its Cambridge HQ, for example. Hopefully, these commitments will be passed on, but other than that current employees might a somewhat comforted to know that Nvidia is generally considered to be a great company to work for.



HEXUS Forums :: 42 Comments

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Fail,and that means even for the UK to use or design ARM based products we would need Congressional approval.

So will if Nvidia owns it will they allow far and easy access to other parties,or do what they did with other partners,and try and push prices up and not play nice?? There is a reason why Sony,Microsoft and Apple don't want to work with them anymore.
our government is a joke allowing these purchases. Once it's gone it's gone. They never should have let it get sold in the first place.
CAT-THE-FIFTH
Fail,and that means even for the UK to use or design ARM based products we would need Congressional approval.

So currently ARM is a UK company with a Japanese parent company, and the technology is deemed UK.
The whole point of having these trees of parent, holding etc companies is to wall things off, so having a US parent company could happily work the same way.

It would only change if Nvidia absorb ARM rather than let ARM run as a UK independent subsidiary, and I'm not convinced absorbing makes any sense.

If I was working on the ARM GPU I might be getting my CV up to date though. I can see pushing SoC IP with ARM CPU license and Nvidia GPU/AI licences becoming a thing.
Pretty bad news.
Can't see Nvidia playing nicely once they are established.

Plus what will be their attitude to Adreno, PowerVR, Mali, and so on long term?

All those vendors who went for ARM for the versatility it gave them will now have to seriously consider RISC-V?
DanceswithUnix
So currently ARM is a UK company with a Japanese parent company, and the technology is deemed UK.
The whole point of having these trees of parent, holding etc companies is to wall things off, so having a US parent company could happily work the same way.

It would only change if Nvidia absorb ARM rather than let ARM run as a UK independent subsidiary, and I'm not convinced absorbing makes any sense.

If I was working on the ARM GPU I might be getting my CV up to date though. I can see pushing SoC IP with ARM CPU license and Nvidia GPU/AI licences becoming a thing.

This is Nvidia we are talking about,and in the end the fact is the UK can say what they want,but once Nvidia is bought by a US firm,US laws will be applicable in some way. Japan is very neutral in how it deals with countries. In fact I am surprised the Japanese government is actually allowing this,as they have strengthened protections of their semi-conductor IP and companies significantly.

I think even 1% foreign ownership of critical firms requires permission from the Japanese government:
https://www.iflr.com/article/b1lmx4p5tmj5zp/primer-japans-new-foreign-investment-law

The A64FX is ARM based for example.

Nvidia owning this,when they make their own ARM CPUs,is a conflict of interest.

Longterm this could be the end of ARM,as countries are developing ARM based products for technological independence. If Nvidia tries its usually stuff,or there is a chance of licenses,being revoked for whatever reason,it's not going to play well. Have you noticed that MIPS never got serious traction,even though it was UK owned for a while?? This will only mean RISC-V will start to get more serious interest. Why do you think the future EU wide processor initiative is RISC-V based??