According to business publications ΠΈ , NVIDIA is close to closing a deal to buy British developer Arm Holdings. Sources say the deal will be announced on Monday. Arm's current owner, Japanese investment firm Softbank, will raise more than $40 billion in cash and stock from the sale, after it acquired Arm for $32 billion four years ago.
While it looks like Softbank is going to make a nice profit from the deal, in fact, Arm's price hasn't been showing very satisfactory performance over the past few years. Four years ago, Arm and NVIDIA were valued at about the same amount. Today, NVIDIA's capitalization is about $330 billion, which is eight times the price it will pay for Arm.
Another interesting point concerns the fact that as a result of the deal, Softbank will receive such an amount of NVIDIA shares that it will make the Japanese company the largest shareholder of the latter. Thus, by selling Arm, Softbank, through its stake in NVIDIA, will bear part of the risks inherent in the deal.
According to sources, these risks are not ephemeral at all. For example, talks between the parties dragged on in part because of the situation with the Chinese arm of Arm, where an attempt to remove director Allen Wu from his post turned into . The dismissed manager, who did not want to leave the workplace, somehow managed to hold on to his position. At the very least, Financial Times sources confirmed that Allen Wu continues to manage the Chinese division, which indicates some uncontrollability of Arm in the region.
To finally convince NVIDIA to agree to the acquisition, Softbank even had to cancel the earlier to spin off IoT business lines from Arm and transfer them to a separate company. Thus, NVIDIA will get all the assets of the British developer without exception.
Naturally, such an acquisition would require regulatory approval, which would likely oblige NVIDIA to continue to license Arm architectures to existing customers. But for NVIDIA, which recently overtook Intel to become the most valuable chipmaker in the world, the deal will strengthen its position as the industry leader anyway. Arm technologies are valuable to NVIDIA in that they will allow it to achieve influence in those market segments where it has not yet had a sufficient presence, primarily in mobile devices. It is clear that in the future, Arm's intellectual property could greatly change NVIDIA's product line, which currently consists mainly of high-performance offerings for gaming systems, supercomputing and AI systems. In addition, NVIDIA will be able to implement vertically integrated computing projects.
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Source: 3dnews.ru