Finance M&A
18:00 14 September 2020
Post by: WBJ

$40 bln chip mega-acquisition to take place

A mega takeover in the chipmaking sector is underway. The well-known designer of integrated circuits, the ARM concern, is to be sold to Nvidia, a concern specializing in the production of chips for graphics cards. The deal may crash, however, due to opposition from market regulators, reports Reuters.

Nvidia is to pay SoftBank Group $21.5 billion in equities and $12 billion in cash, including $2 billion at the time the agreement is signed.

As a result of the acquisition, there will be a serious reshuffle in this market segment, which may raise supervisory objection related to the risk of monopoly. SoftBank and the Vision Fund, which owns 25 percent of shares in ARM, will take up 6.7 and 8.1 percent of Nvidia shares.respectively. 

SoftBank may also receive an additional $5 billion in cash or stocks, depending on the chip designer's business performance, and ARM employees are expected to receive $1.5 billion in Nvidia stocks.

The disposal of ARM shares by SoftBank takes place four years after the Japanese giant invested in a British chip technology company for $32 billion.

The agreement is subject to regulatory approvals, including in the UK, US and China, and is expected to be finalized in March 2022. The closing of the ARM acquisition transaction is scheduled for March 2022.

ARM does not manufacture chips, it only designs computational cores and their structures and instruction sets. Yet,  Apple's upcoming Macs will use ARM-based chips.

(Puls Biznesu)

vision fund

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