7 February Nvidia announced plans to buy out Arm developer from SoftBank. The deal could be the largest in the semiconductor industry.
What the companies said
"Despite all efforts, The parties have decided to terminate the agreement due to serious regulatory issues.", Nvidia said in a press release.
And the SoftBank group - the owner of Arm - announced the release of the developer on the exchange. IPO is promised to be held before 31 March 2023. SoftBank bought Arm in 2016 for $32 billion.
Nvidia to Pay $1.25 Billion Fine to SoftBank for Breaking Deal. That's exactly half of Nvidia's net income in the third quarter of 2022, which ended 31 October.
Why was the deal canceled?
Nvidia announced the deal in September 2020. The company expected to pay about $ 40 billion in cash and shares for Arm. Immediately after the announcement, regulators and chip developers began to raise concerns about a possible Nvidia monopoly..
Arm is a license holder and technology developer, used in smartphone processors. For example, on iPhone and most Android devices. And almost all major semiconductor companies are customers of Arm. For example, Qualcomm и Intel. According to companies in the industry, after the deal, Nvidia could restrict access to technology and become a monopoly.
Regulators in different countries were also against the deal.. So, in December 2021, the US Federal Trade Commission filed a lawsuit and demanded that the agreement be canceled. UK Competition Authority, Where is Arm, also conducted its own investigation.
In premarket, Nvidia shares barely reacted to the press release and dropped by 0,5%, to 246 $.