The proposed merger with Nvidia Arm hit another roadblock after the EU and UK announced they would open competition investigations into the deal. Last September, Nvidia confirmed that it had reached an agreement to buy British chipmaker Arm for $40.000 billion. However, since the deal was announced, it has come under intense scrutiny. Arm's processors are used in the vast majority of smartphones, and the company currently has an open-licensing business model based on customer neutrality. It is feared that this could be threatened if the Nvidia acquisition continues. Reports now indicate that the EU and the UK have agreed to look at the deal further, with both refusing to rule out blocking the deal outright. If not, it could be approved pending concessions.
Is the deal over?
The fact that other regulators are involved will not be surprising. Late last year, the US Federal Trade Commission announced that it would also seek more information about the deal to ensure it did not violate competition rules. SoftBank, the current owner of Arm, and Nvidia have apparently set an 18-month deadline to complete the acquisition. The UK survey, which is slightly earlier than the EU, has already asked companies to present their views on the deal. Microsoft-backed semiconductor firm Graphcore is believed to be just one of many companies raising concerns. However, it should be noted that the two investigations are still at a preliminary stage. Currently, things are not looking good for the Nvidia deal. It seems unlikely that the American company would be willing to pay such a high fee to buy Arm if it doesn't see a competitive advantage, and that would naturally hurt its smartphone rivals. To further complicate matters, UK regulators are also examining whether an Nvidia takeover would have national security implications. Via the Financial Times