Nvidia buys ARM from Softbank for $ 40 billion

The agreement announced on Sunday will be financed through a mix of cash and stock, the companies said in a joint statement.

This step will be allowed Nvidia (NVDA) – which primarily makes graphics processors for computer games and self-driving cars – to become an industry leader in more connected devices, including smartphones, PCs, robotics and 5G, CEO Jensen Huang sent a letter to employees Sunday Written in
ARM designed chips Apple (AAPL) And other major smartphone manufacturers. The firm is based in Cambridge and is known as one of the UK’s most successful tech companies.

Nvidia said on Sunday that it plans to keep Arm’s headquarters in Cambridge, as well as expanding its campus with a new research facility.

“ARM’s business model is fantastic. We will maintain our open-licensing model and customer neutrality, serve customers in any industry worldwide and further expand ARM. [intellectual property] Licensing Portfolio, ”Huang wrote.

The deal is likely to come under significant scrutiny in the United Kingdom, where some politicians are concerned about preserving jobs at ARM. Nvidia’s rivals – who buy chip designs from ARM – are also likely to object.

The Prime Minister’s official spokesman said on Monday that the UK government would not hesitate to investigate any acquisitions that could have a major impact on the country.

Sale of another property for SoftBank

The deal comes four years after SoftBank bought ARM for $ 32 billion, the largest overseas acquisition by a Japanese firm at the time.
SoftBank has been working to divest assets in recent months as Coronomerate looks to raise cash in response to the coronovirus epidemic. In March, it announced plans to sell assets worth $ 41 billion and last month it doubled with partial sale of its stake in its Japanese mobile carrier affiliate.
SoftBank shares were up nearly 9% in Tokyo on Monday after the news. The Financial Times also reported on Monday that SoftBank is rethinking plans to privatize the company. Softbank declined to comment on the report.

“The combination is likely to raise SoftBank’s stock price in Tokyo,” wrote Jeffrey Haley, Asia Pacific’s senior market analyst at Oda.

SoftBank dipped on news reports that Massa Son Tech is betting big on stocks
If the ARM deal happens, it would be the 2015 semiconductor industry’s biggest deal, topping according to Broadcom’s acquisition of Avago in 2015.

Under the agreement, Nvidia will pay approximately $ 12 billion in cash and $ 21.5 billion in stock. According to SoftBank, SoftBank will get a stake of less than 10% in Nvidia, and the Japanese company will also be eligible for payments of up to $ 5 billion when ARM meets “specific financial performance goals”. The company did not disclose the goals.

The deal is expected to close within 18 months. It must first pass regulatory approval from the United Kingdom, the European Union, the United States and China.

– Luke McGee and Charles Riley contributed to this report.


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