Foreign media: Many regulators opposed NVIDIA's $66 billion acquisition of Arm failed

Nvidia's acquisition of Arm failed.

On February 8, the Financial Times quoted three people familiar with the matter as saying that SoftBank's deal to sell British chip business Arm to Nvidia for $66 billion failed on Monday after regulators in the United States, the United Kingdom and the European Union expressed serious concerns about its impact on competition in the global semiconductor industry.

The deal is the largest ever made by the chip industry, and if successful, it will give Nvidia control of a company that controls the core of most of the world's mobile devices. Large tech companies that rely on Arm chip designs, including Qualcomm and Microsoft, have opposed the acquisition.

A person familiar with the matter said that SoftBank will receive up to $1.25 billion in compensation fees and seek to prepare for Arm's initial public offering by the end of the year. The person familiar with the matter added that the failure will lead to a drastic change in Arm's management, with CEO Simon Segars being replaced by Rene Haas, head of the company's intellectual property division.

The failure of the deal due to the rise in NVIDIA's stock price cost SoftBank the huge windfall it deserved. When announced in September 2020, the cash and stock transaction was worth as much as $38.5 billion. But as Nvidia's stock price soared, it peaked at $87 billion last November.

As early as late January, there was news that Nvidia was preparing to abandon the acquisition of chip design company Arm from SoftBank Group.

Peng reported at the time that Arm's sale was under intense scrutiny because its chips were designed for use in everything from mobile phones to cars to factory equipment, making neutrality the foundation of its business model. The world's largest tech companies rely on Arm's technology, and they worry that under Nvidia's leadership, tech companies could lose unfettered access.

Companies including Qualcomm, Microsoft, Intel and Amazon have provided regulators around the world with what they believe is enough to block the deal, according to Bloomberg quoted people familiar with the matter on Jan. 25. In addition to approval in the U.S. and China, the acquisition of Arm will require approval from the European Union and the U.K., which are also closely studying the deal.