Nvidia Reportedly Acquiring ARM For $40 Billion

"SoftBank is set to sell the U.K.'s Arm Holdings to U.S. chip company Nvidia for more than $40 billion," writes Ars Technica, adding that the deal's imminent announcement was reported earlier by the Wall Street Journal. The move comes just four years after Softbank bought ARM, promising it would become their company's linchpin: Multiple people with direct knowledge of the matter said a cash-and-stock takeover of Arm by Nvidia may be announced as soon as Monday, and that SoftBank will become the largest shareholder in the U.S. chip company.

The announcement of the deal hinged on SoftBank ending a messy dispute between Arm and the head of its China joint venture, Allen Wu, who earlier rebuffed an attempt to remove him and claimed legal control of the unit. Several people close to SoftBank said the matter was now "resolved," though one person close to Mr Wu said he "remains the chairman of Arm China." A spokesperson for Mr Wu declined to comment.

The takeover values Arm above the $32 billion price that SoftBank paid for the business in 2016, a deal that was struck weeks after the U.K. voted to leave the European Union and prompted critics including Arm's founder to accuse the country of selling off the crown jewel of its tech sector. While Nvidia is paying more for the asset than SoftBank did, the price also reflects the scale of Arm's underperformance under the Japanese group's ownership. Nvidia had a market valuation of roughly similar to that of Arm's at the time of the 2016 deal, but now trades with a market value of $300 billion, or roughly 10 times the amount SoftBank paid in cash for Arm. By paying for a large portion of the deals with its own shares, it is also passing part of the risk of the transaction to SoftBank. For Nvidia, which recently overtook Intel to become the world's most valuable chipmaker, the deal will further consolidate the US company's position at the centre of the semiconductor industry...

One person close to the talks said that Nvidia would make commitments to the UK government over Arm's future in Britain, where opposition politicians have recently insisted that any potential deal must safeguard British jobs.