The leading graphics processor company NVIDIA and the Japanese telecommunications holding SoftBank Group Corp. have reached an agreement to end the deal to acquire the British microprocessor company Arm Ltd. that was reached in September 2020. Negative or at least concerned opinions expressed repeatedly over time by the USA, UK, and EU antitrust authorities resulted in NVIDIA’s inability to proceed with the acquisition. Arm CEO Simon Segars resigned and was replaced by Rene Haas (Photo courtesy Arm. All rights reserved), who was already the company’s president. The new plan consists of an IPO for Arm, perhaps at the London stock exchange.
The deal announced in September 2020 between NVIDIA and SoftBank was really big, as the total price was around $40 billion, to be paid for a good part in NVIDIA shares, which value increased significantly in the following period. The deal immediately appeared complex due to Arm’s importance in the field of microprocessors, especially in a period in which the chip production is suffering and the possession of licenses on widely used hardware architectures increased its importance.
In the UK, Arm is considered a national asset more than ever, and the concentration in the microprocessor field that would follow the acquisition by NVIDIA had several other companies worried. In these cases, the approval of the antitrust authorities is far from granted and the current situation in the field of chip production, which would have made the deal even more significant, certainly didn’t help.
For SoftBank, which comes out of a year of negative results with a sharp decline in its share value, it’s now necessary to move forward quickly and above all with a clear plan. The announcement of the replacement of Arm’s CEO came along with that of the agreement with NVIDIA’s termination and that of the new plan for Arm’s IPO. There are possible problems with this plan too.
Arm’s importance as a British asset makes London the most likely location for the company going public. Despite Brexit, the company could benefit from the Chips act, the European Union project to invest at least 42 billion Euros in the semiconductor industry to increase Europe’s importance in this field. However, according to some sources, SoftBank would rather list Arm at the New York Stock Exchange, where tech companies can be highly valued.
SoftBank’s plan for Arm’s IPO has a deadline linked to the fiscal year, which ends on March 31, 2023. In this period, a company specializing in the design of microprocessors such as Arm is more important than ever, so the developments of the plans for its future may shift the global balance in the field of chip manufacturing.
