Softbank UK-based Arm Holdings is set to sell the chips to US company Nvidia for more than $ 40 billion, just four years after founder Masayoshi Son bought chip designer and said it would be the backbone of the future of the Japanese tech group.
Many people with first-hand knowledge of the issue said Arm by’s cash and inventory acquisitions NVidia It may be announced as soon as Monday, and SoftBank will become the largest shareholder of the American chip company.
The announcement of the deal hinges on SoftBank ending a chaotic dispute between Arm and the head of its Chinese joint venture, Allen Wu, who earlier rejected the removal attempt and claimed legal control of the unit.
Several close to SoftBank said the matter was now “resolved”, although someone close to Mr Wu said he was “still the boss of Arm China”. A spokesman for Mr. Wu declined to comment.
The Arm acquisition estimates above the $ 32 billion price SoftBank paid for the company in 2016, a deal struck weeks after the UK voted to leave the European Union and prompted critics, including Arm’s founder, to accuse the state of selling the crown jewel. Technology sector.
While Nvidia is paying more for the asset than SoftBank has, the price also reflects how poorly the Arm is performing under the Japanese group’s ownership.
Nvidia had a market valuation roughly similar to that of Arm at the time of the 2016 deal, but is now trading with a market cap of $ 300 billion, or nearly 10 times the amount SoftBank paid in cash for the Arm. By paying for a large portion of the deals with its shares, it also transfers a portion of the risk of the deal to SoftBank.
Nvidia started recently Outperformed Intel To become the world’s most valuable chip maker, the deal would cement the US company’s position at the heart of the semiconductor industry. The British chip designer technology is starting to find wider applications outside of mobile devices, in data centers and personal computers including Apple’s Macs.
Arm will change Nvidia’s product lineup, which has so far focused largely on the end of the chip market. Powerful graphics processors – designed to handle intensive tasks that demand data intensive – are typically sold to computer players, scientific researchers, AI developers, and self-driving cars, as well as cryptocurrency miners.
To clear the way for the deal, SoftBank rolled back a previous decision to pull out the IoT Arm Company and turn it into a new company under its control. That would have stripped Arm of what was supposed to be the high-growth engine that would propel it into a 5G future. One person said SoftBank made the decision because it would have put it in contradiction to the commitments made to the UK regarding the Arm, which had been agreed at the time of the 2016 agreement to satisfy the government.
SoftBank’s Vision Fund previously owned a stake in Nvidia, in a rare listed investment for a $ 100 billion fund focused on private tech companies. inventory All its shares early last year. Akshay Nahita, the 39-year-old CEO of SoftBank who led the investment, was also heavily involved in the negotiations between the Japanese group and Nvidia.
Another person added that the Vision Fund, which is run by Rajiv Misra, a close ally of Nahita and his former Deutsche Bank colleague, controls a 25 percent stake in Arm and will receive compensation as part of the deal.
A person close to the talks said that Nvidia will make commitments to the UK government about the future of the Arm in Britain, as opposition politicians recently insisted that any potential deal should Protect British jobs.
The Wall Street Journal earlier reported the imminent announcement of the deal.
Co-reporting by Ryan Makamura in Beijing