NVIDIA might face difficulty in closing of $40 Bn Arm deal
By MYBRANDBOOK
NVIDIA Corp may not be able to close the deadline of March 2022 for closing its $40 billion acquisition of British chip technology firm Arm Ltd. As per Reuters, it is due to European regulators’ reluctance to consider the case until after the summer holidays.
Last year, NVIDIA announced the Arm deal. Arm has long been a neutral player licensing key intellectual property to customers who are otherwise intense rivals, including Qualcomm Inc, Samsung Electronics and Apple Inc.
Regulatory approval from U.S., European and Chinese authorities are required by the company, all of which are expected to scrutinize the transaction closely. Last year, NVIDIA told investors that it plans to close the deal by March 2022, the purchase agreement gives the two companies the option to extend the deadline to September 2022. But at that point, either party has the option to walk away if the deal does not receive government approval.
NVIDIA has not yet filed an application to clear the deal with the European Commission. Officials there have made it clear to the company that they need until September to gather enough information to accept NVIDIA's formal application for approval, according to three people familiar with the matter.
That could make it difficult for NVIDIA to close the deal by March of next year as planned, these people said.
The U.S. Federal Trade Commission has been gathering information about the deal, people familiar with the matter told news source. As per news source, NVIDIA has filed for approval of the deal in China.
In a statement, NVIDIA said that “many jurisdictions have a pre-notification period, where the parties have a detailed and ongoing dialogue with regulators. Our discussions with regulators have been thorough and constructive. We’ll continue to work throughout the summer, as we anticipated all along, and expect to close in early 2022.”
By the letter of the law in Europe, NVIDIA can file its application at any time. But in practice, regulatory attorneys said, most companies wait until receiving an informal go-ahead from regulators before formally filing.
The NVIDIA-Arm deal also faces headwinds in the United Kingdom, which has said it will conduct a national security review of the deal. Headquartered in Cambridge, England, Arm is considered a crown jewel of the country's tech industry, and British regulators required it to set UK headcount targets before allowing it to be sold to Japan's SoftBank Group Corp in 2016.
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