Nvidia’s proposed acquisition of British chip designer Arm has seen its fair share of drama. The final installment of the saga revolves around a statement provided by Nvidia to the UK Competition and Markets Authority (CMA), in which Nvidia and Arm made some pretty compelling arguments in favor of the proposed deal. of $ 40 billion.
Nvidia officially announced its intention to acquire Arm in September 2020. With the approval of current owner Softbank, Nvidia felt a brief period of exhilaration, but this was short-lived as various regional competition regulators have moved. weighed in to take a closer look at the chord. In the United States, the FTC has been prompted by interested parties such as Qualcomm, Google and Microsoft to take a very close look at Nvidia’s proposed acquisition of Arm. In the UK, the CMA initially seemed to have a negative view of the takeover, but decided to conduct a deeper and longer study on the implications. The EU has also launched its own investigations into the implications of a merger with Nvidia Arm.
Returning to the UK CMA investigations, the British regulator has just published a PDF where Nvidia and Arm presented their arguments [PDF] in favor of the acquisition. The lengthy document, called a “Phase 2 Bid,” examines all of the key markets addressed by Nvidia and Arm and the reasons why the merged entity will not hurt competition in those areas. He also laments the current state of affairs with Arm in limbo as the contestants struggle to move forward. Another important point is that it reminds us that Nvidia is ready to commit to certain important legal obligations to obtain the full approval of this acquisition.
The arm is at a crossroads
In the introduction to the recently released CMA document, Nvidia points out that “Arm is at a crossroads”. It is argued that Arm will boldly forge ahead with abundant R&D and become a stronger IT industry leader than ever before, or it will be stripped of assets for short-term gains – giving in to the pressure. shareholders. The first would be seen thanks to Nvidia’s backing, and the second if Arm were to face an IPO, Nvidia’s statement argues. Arm CEO Simon Segars agrees with Nvidia’s case against an IPO. “We considered an IPO, but determined that the pressure to generate short-term revenue growth and profitability would stifle our ability to invest, grow, scale quickly and innovate,” Segars noted.
Inaction means Arm could be left behind by rivals
Throughout the document, as submitted to the CMA, Nvidia asserts that its business and Arm’s overlap little, if at all, and therefore do not present reduced competition concerns. Moreover, the document repeatedly asserts that the merged entity will not change its competitive behavior, to the detriment of current customers. A common theme, as various markets are considered (data center, PC, consoles, smart devices) in the document, is that competitors like AMD, Intel, Apple, Qualcomm and others are moving forward as that Arm lives in an uncertain and underinvested country. of uncertainty.
Nvidia’s conclusion is that the UK CMA should approve the deal quickly, in order to avoid further damage / oil changes on Arm, to ensure better levels of investment in UK and to maintain strong competition between computer architectures around the world.