SoftBank Group Corp is in a deal to sell British chip designer Arm Holdings for more than $ 40 billion to Nvidia Corp, the latest in a series of large asset sales by the Japanese technology group.
The Wall Street Journal reported on Saturday that the cash and stock deal being discussed would reduce Arm’s value to $ 40 billion. The conditions under discussion would be a major win for SoftBank SFTBY.
, Which bought Arm four years ago for $ 32 billion and struggled to start growing the business.
Special negotiations have been underway for several weeks and a deal could be sealed early next week, assuming it did not derail at the last minute.
ARM designs microprocessors that power most of the world’s smartphones. By joining forces with Nvidia, the combined company will be a powerhouse in the semiconductor or chip industry.
Nvidia is a rapidly emerging industry player, whose chips are used to drive deep computations for graphics- and play a key role in videogaming, cloud-computing, and other activities for which the coronavirus pandemic stalled demand Have given. It has sent its shares over 100% this year, making it the best-performing stock in the S&P 500 Index SPX,
Should there be a deal, it would be the largest transaction so far this year and potentially the largest semiconductor deal. Although the epidemic-led business disruptions have reduced global transaction volumes, consolidation in the semiconductor industry has kept pace as chipmakers expand their product portfolio to support a growing number of everyday commodities And are connected to the Internet. Such linkage is commonly called the Internet of Things. Maxim Integrated Products Inc. was one of the largest $ 22 billion deal by fellow chipmaker Analog Devices Inc. ADI.
Nvidia’s sales could prompt investigations from antitrust regulators and potential pushback from Arm’s customers, including major chipmakers and electronics manufacturers such as Intel Corp. INTC.
AAPL, Samsung Electronics Co. and Apple Inc.,
An extended version of this story appears on WSJ.com