Today, the road to “sale” is almost blocked. Is SoftBank Group’s next step to relist Arm?

Perhaps no one thought that the first to stop Nvidia from acquiring Arm was the United States.

On the 2nd local time, the US FTC (Federal Trade Commission) filed a lawsuit on antitrust grounds in an attempt to “stop” this $40 billion transaction.

In the FTC’s view, this transaction will allow Nvidia to obtain the computing technology and design that control competitors rely on to develop competing chips. The combined company will also have the means and motivation to stifle the next generation of innovative technologies.

In addition to the FTC, the European Union and the United Kingdom are also “in-depth investigation” of the acquisition

As we all know, acquisitions involving the merger of two giants like Nvidia’s acquisition of Arm usually need to be reviewed and approved by major market countries.

But just recently, both the UK and the EU have launched in-depth investigations.

Among them, the British Digital Minister Nadine Dorries has written to the British antitrust agency “Competition and Markets Authority” (CMA) in November, instructing the CMA to conduct an in-depth second-stage investigation of Nvidia’s acquisition of Arm on the grounds of competition and national security. .

The first survey was launched in January this year, and the results showed that after the merger, NVIDIA will have the ability and motivation to damage the market competitiveness of its competitors.

It is understood that the second phase of the investigation is expected to last about six months. After this round of investigation is over, the CMA may block or approve the transaction, or it may ask Nvidia to make concessions.

However, it seems that the industry generally believes that the possibility of blocking is greater.

In addition, the European Union has also launched an in-depth investigation of the transaction on November 25.

Previously, Margrethe Vestager, Executive Vice President of the European Commission, stated in a statement:

Although Arm and Nvidia do not directly compete, Arm’s intellectual property is the core of Nvidia’s competitors’ products, such as in the data center, automotive and Internet of Things markets.

We found that Nvidia’s acquisition of Arm may result in limited or degraded access to Arm’s intellectual property rights, which will have a distorting effect in many semiconductor-related markets.

However, just yesterday afternoon, the European Commission published a new document on the website of the European Commission, which stated that the review of Nvidia’s acquisition of Arm was suspended. It is not known whether the decision was made because of the lawsuit initiated by the FTC.

At the same time, perhaps affected by this news, after the stock market opened on the 3rd local time, Nvidia’s stock price also went “green”, closing at $306.93/share, down 14.26 from the previous day’s $321.26/share. 33 U.S. dollars, a drop of 4.46%.

If the acquisition fails, NVIDIA will lose 1.25 billion US dollars “deposit”

With the tightening of supervision in major countries and the fermentation of the FTC’s litigation and other events, the business of Nvidia’s acquisition of Arm is becoming less and less promising.

Alan Priestley, a semiconductor analyst at Gartner, said that the deal looks increasingly unlikely to succeed: “In the face of more and more regulatory investigations around the world, I think the probability of this deal being rejected is extremely high.”

In fact, even Nvidia itself seems to be somewhat lacking in self-confidence in this matter.

Initially, Nvidia stated that it would complete the transaction within 18 months, but now 14 months have passed since the official announcement of the acquisition.

Just in August this year, Huang Renxun “relaxed” and admitted that the acquisition is unlikely to be completed within 18 months because the transaction is facing a protracted regulatory investigation. However, at that time, Nvidia was still “confident” that the regulator would approve the transaction.

It is just worth noting that just before this June, Huang Renxun also publicly stated his opinion on the acquisition of Arm:

Nvidia’s own development is also very good, it does not have to be acquired. The reason for this is that we want to make computers more powerful.

Looking at it this way, do Nvidia and Huang Renxun have been mentally prepared for “unsuccessful acquisition”?

As for the result of the unsuccessful acquisition, Nvidia also issued a warning to investors at the previous financial report meeting, stating that if the regulatory authority does not make a decision within the deadline, Nvidia will lose $1.25 billion in advance payments, or about RMB 8 billion. Yuan.

Waiting for Arm, is it re-listing?

As Huang Renxun said earlier, Nvidia’s own development is very good, which also means that even if the acquisition is unsuccessful, the impact on the company’s own business is limited and will not pose a threat.

On the contrary, because of successive errors in investment and other factors, SoftBank Group can be said to be “very short of money”, which is also the main reason why it chose to sell Arm.

Earlier, when Nvidia had not announced the acquisition of Arm, there have been rumors in the industry that SoftBank would deal with Arm. In the rumors at that time, Softbank prepared two ways to deal with it, one is to sell, and the other is to relist.

Looking at it now, referring to NVIDIA’s acquisition of Arm, if the final sale is unsuccessful, given the consideration of Arm’s “neutrality”, it must be impossible even if other chip companies are willing to take over.

Of course, SoftBank can also choose to let Arm return to the secondary market. As for how Arm will perform at that time, it is still unknown.

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