Nvidia preparing to walk away from Arm acquisition - Bloomberg News

FILE PHOTO: The logo of technology company Nvidia is seen at its headquarters in Santa Clara, California February 11, 2015. . REUTERS/Robert Galbraith/File Photo/File Photo

(Reuters) - Nvidia Corp is preparing to abandon its purchase of Arm Ltd from SoftBank Group Corp after offering about $40 billion for the British company in 2020, Bloomberg News reported on Tuesday, citing people familiar with the matter.

The U.S. chipmaker has told partners that it does not expect the deal to close, the report said, adding that SoftBank is stepping up preparations for an initial public offering (IPO) of Arm.

Nvidia shares dropped 4.8%, leading losses among chipmakers in a broadly weaker market.

An Nvidia spokesperson said the company continues to believe the acquisition "provides an opportunity to accelerate Arm and boost competition and innovation." Arm and SoftBank did not respond to Reuters requests for comment.

The deal has faced several regulatory hurdles, with the U.S. Federal Trade Commission suing to block it in December. The buyout is also under the scrutiny of British and EU regulators amid concerns that it could push up prices and reduce choice and innovation.

Earlier in the day, a European Commission filing showed that EU antitrust regulators have resumed their investigation of the deal and set a new deadline of May 25 for their decision.

Jonathan Kanter, the new head of the U.S. Justice Department Antitrust Division, has said he would seek to stop mergers that pose anticompetitive concerns rather than striking deals for concessions that would allow the transaction to close.

Arm's CEO said in July last year the company had contemplated an IPO but that would hurt its ability to expand and invest.

"I do think it is safe to say that Nvidia would likely have invested more (possibly much more) than hypothetical public investors in Arm might be willing to stand," said Bernstein analyst Stacy Rasgon.

(Reporting by Chavi Mehta and Akash Sriram in Bengaluru; Additional reporting by Supantha Mukherjee in Stockholm; Editing by Aditya Soni)

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights


Next In Tech News

Booking hotels online: Why you can never trust reviews 100%
Dyson shows off robotic arm that can find crisps at back of your sofa
Four years on, is the GDPR a pain or a forerunner in data protection?
Research: Google Chrome only blocking a quarter of phishing websites
Google Street View’s ‘time travel’ feature comes to smartphones
Meta eyes profits with new WhatsApp platform for businesses
Amazon investor proposal to review plastic use narrowly fails to clear
Transport Canada probing cause of Tesla fire in Vancouver
Binance registers with Italy's regulator amid plans to expand in Europe
Rio airport screens show porn movies in apparent hack

Others Also Read