King's gambit

14 September 2020 By Robyn Mak Follow @mak_robyn

The chip specialist led by Jensen Huang will buy the UK company from SoftBank in the industry’s biggest deal. It gives Nvidia a boost in the data centre business. But Arm’s customers and regulators may baulk, and the chunky price tag presupposes huge growth and market share gains.

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U.S.-based Nvidia on Sept. 13 said it will acquire chip designer Arm from SoftBank Group and its Vision Fund in a deal worth as much as $40 billion.

Nvidia will pay SoftBank $21.5 billion in shares, and $12 billion in cash. SoftBank could also be paid an additional $5 billion in cash or shares depending on the chip designer's business performance. As part of the deal, Arm employees will also be paid $1.5 billion in Nvidia shares.

SoftBank and its Vision Fund will own a less than 10% stake in the enlarged business.

Completion of the transaction is expected to take place in approximately 18 months and is subject to approvals in the UK, China, Europe and the United States.

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