NVIDIA Acquisition of Arm Collapses, UK Company to Seek IPO

NVIDIA's long-awaited acquisition of Arm Ltd. is collapsing, confirm Financial Times and Reuters. According to the latest information, the deal is not happening, and the previously agreed terms are no longer valid. As we now know, NVIDIA will have to pay Softbank (Arm's owner) a break-up fee of $1.25 billion, which was the deal that the two settled on if the acquisition fails. NVIDIA has originally planned to purchase Arm for $40 billion. However, the regulators from UK and EU have been blocking the deal from happening on the terms that it would hurt competition and block innovation.

What is next for Arm Ltd. is to go public and list itself on one of the world's biggest stock exchanges, either domestically or overseas in the US. The IPO efforts of Arm are estimated to be worth around $80 billion, representing a double amount of what NVIDIA wanted to purchase the company for.Update 08:35 UTC: Here is the official press release from NVIDIA and Softbank below:

NVIDIA (NASDAQ: NVDA) and SoftBank Group Corp. ("SBG" or "SoftBank") today announced the termination of the previously announced transaction whereby NVIDIA would acquire Arm Limited ("Arm") from SBG. The parties agreed to terminate the Agreement because of significant regulatory challenges preventing the consummation of the transaction, despite good faith efforts by the parties. Arm will now start preparations for a public offering.

"Arm has a bright future, and we'll continue to support them as a proud licensee for decades to come," said Jensen Huang, Founder and Chief Executive Officer of NVIDIA. "Arm is at the center of the important dynamics in computing. Though we won't be one company, we will partner closely with Arm. The significant investments that Masa has made have positioned Arm to expand the reach of the Arm CPU beyond client computing to supercomputing, cloud, AI and robotics. I expect Arm to be the most important CPU architecture of the next decade."

SBG today also announced that, in coordination with Arm, it will start preparations for a public offering of Arm within the fiscal year ending March 31, 2023. SBG believes Arm's technology and intellectual property will continue to be at the center of mobile computing and the development of artificial intelligence.

"Arm is becoming a center of innovation not only in the mobile phone revolution, but also in cloud computing, automotive, the Internet of Things and the metaverse, and has entered its second growth phase," said Masayoshi Son, Representative Director, Corporate Officer, Chairman & Chief Executive Officer of SoftBank Group Corp. "We will take this opportunity and start preparing to take Arm public, and to make even further progress."

Mr. Son continued, "I want to thank Jensen and his talented team at NVIDIA for trying to bring together these two great companies and wish them all the success."

NVIDIA and SBG had announced that they had entered into a definitive agreement, under which NVIDIA would acquire Arm from SoftBank, on September 13, 2020. In accordance with the terms of the agreement, SBG* will retain the $1.25 billion prepaid by NVIDIA, which will be recorded as profit in the fourth quarter, and NVIDIA will retain its 20-year Arm license.

* 24.99% of Arm shares are attributable to SoftBank Vision Fund 1.