Softbank plans to sell US chip company Nvidia to UK arm holdings for more than $ 40 billion, four years after its founder Masayoshi Son said it would be the linchpin for the Japanese technology group’s future .
Several people directly aware of the matter said that Arm’s cash-and-stock acquisition by Nvidia could be announced as soon as Monday, and Softbank would become the largest shareholder in the US chip company.
The announcement of the deal at SoftBank ended a dispute between Arm and its China joint venture chief Ellen Wu, which previously rebuffed an attempt to oust him and claimed legal control of the entity.
Several people close to SoftBank said the matter had now been settled, although a person close to Mr Wu said he was “the chairman of Arming China”. A spokesman for Mr. Wu declined to comment.
In 2016, SoftBank assumed the acquisition of Arm Tech at a price of $ 32 billion for the business, a deal that occurred weeks after Britain left the European Union and critics including the founder of Arm to accuse it of selling the country’s crown inspired. Its technical area.
While Nvidia is paying for more assets than SoftBank, the price also reflects the scale of underperformance of the arm under the ownership of the Japanese conglomerate.
At the time of the 2016 deal, Nvidia had almost the same market valuation as Arm, but now with a market value of $ 300 billion, or about 10 times more than SoftBank paid in cash for Arm. By paying for a large portion of the deals with its own shares, it is also undergoing transaction risk to SoftBank.
For Nvidia, which recently beat Intel to become the world’s most valuable chipmaker, the deal would further strengthen the US company’s position at the center of the semiconductor industry. The technology of the British chip designer is beginning to find widespread applications beyond mobile devices, data centers, and personal computers, including Apple’s Mac.
Arm will replace Nvidia’s product line-up, which so far has largely focused on the high end of the chips market. Its powerful graphics processors – designed to handle focused, data-intensive tasks – are typically sold to PC gamers, scientific researchers and developers of artificial intelligence and self-driving cars, as well as cryptocurrency miners.
To pave the way for the deal, SoftBank overturned an earlier decision to remove the Internet-of-Things business from Arm and transfer it to a new company under its control. It is meant to be a high-growth engine, which will power it in a 5G-connected future. One person said Softbank made the decision because it put it in conflict with commitments made on the arm for Britain, which agreed at the time of the 2016 deal to appease the government.
SoftBank’s Vision Fund previously bought a stake in Nvidia, a publicly listed $ 100 billion fund focused on private technology companies, but divested all of its shares early last year. Akshay Nahata, a 39-year-old Softbank executive who accelerated that investment, has also been heavily involved in negotiations between the Japanese conglomerate and Nvidia.
Another person said that the Vision Fund, which is run by Rajeev Mishra, a close associate of Mr. Nahata and former associate of Deutsche Bank, controls a 25 percent stake in the arm and will get it as compensation.
A person close to the talks said that Nvidia would make commitments to the UK government about the future of the arm in the UK, where opposition politicians have recently insisted that any possible deal should protect British jobs.
The Wall Street Journal previously reported an imminent announcement of the deal.
Additional reporting by Ryan McMore in Beijing.
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