Nvidia’s bid for Arm hit by competition investigation

Danni Hewson
20 August 2021

Danni Hewson, AJ Bell financial analyst, comments on the CMA’s decision to launch an in-depth investigation into the takeover of Arm by Nvidia:

“US chipmaker Nvidia has been dealt a big blow to its plans to snap up British chip designer Arm by the UK competitions watchdog.  The CMA has reported that the acquisition raises serious concerns that innovation could be stifled and says further investigation is required.  The update comes just a day after Nvidia’s boss hinted that all was not going as smoothly with the purchase as he’d hoped and that it may take longer than the 18 months he’d previously expected.

“The competition issue has been a thorny one.  It’s current owner, the Japanese Company Softbank, has been considered a neutral entity and despite assurance that Nvidia would continue to operate Arm in the same manner, it’s an uncomfortable fit.   Over the last few months, the world has become increasingly aware of the importance of the chip. Global shortages have forced many sectors to curb production leading to price rises for consumers.  Whilst Arm isn’t British owned it is British based and regulators and the government will be feeling the weight of investor expectation amidst a number of high profile and sensitive takeover attempts.

“The $40 billion deal now looks shaky at best and there has been mounting speculation that Arm’s current owners might be contemplating a different route and may now consider listing Arm on the stock market rather than looking for a buyer.  Whatever happens the world will be watching, Arm’s architecture is incredibly popular with some of the biggest technology companies and chips are as integral to growth as oil used to be.  Even if Nvidia can overcome the CMA’s concerns it still has to persuade regulators in China and the EU that the deal makes sense before its window of opportunity closes.”

Danni Hewson
Financial Analyst

Danni spent more than 19 years at the BBC, presenting and reporting on business news across a variety of programmes – including BBC Breakfast, BBC News Channel, BBC Look North and latterly Radio 5 Live’s flagship business programme ‘Wake up to Money’. She is now responsible for producing analysis and commentary across a broad range of subjects at AJ Bell, from financial markets, to economics and personal finance.

Contact details

Mobile: 07593 451 437
Email: danni.hewson@ajbell.co.uk

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