£30bn Arm takeover on the rocks: Ministers hint Nvidia deal could be blocked as former boss backs stock market return
Ministers last night gave the strongest signal yet that the £30billion takeover of Arm could be blocked as the British chip designer’s former boss called for it to return to the stock market in London.
As the row over the proposed acquisition by US rival Nvidia escalated, the Government said it was ‘examining the deal carefully’ and ‘will not hesitate to investigate further and take appropriate action’.
The comments – which raised the prospect that the deal could be blocked – came as pressure mounted on competition regulators to launch a separate full-scale probe.
Support: Former Arm chief executive Warren East said he would welcome the tech firm’s return to the London stock market if the takeover by Nvidia falls through
The close attention of both the Government and the Competition and Markets Authority poses twin threats to the proposed sale of Arm by owner Softbank to Nvidia.
Former Arm chief executive Warren East – now boss of engineer Rolls-Royce – said he would welcome the tech firm’s return to the London stock market if the takeover by Nvidia falls through.
He said: ‘I would be glad to see it under public ownership. I was always very proud to be head of a global leader listed and based in the UK.
It would be great if Britain could have more global leading tech companies, there aren’t many.’
Arm was listed on the London stock market before being sold to Softbank for £24billion in 2016, a deal that drew heavy criticism for then prime minister Theresa May.
And pressure is mounting on British regulators to launch a full scale investigation into the proposed sale to Nvidia. The CMA said earlier this month that it would look at the deal and ask rivals to comment.
It is understood that since January 6 some of the UK’s largest chip and semiconductor companies have written to the CMA asking for the deal to be blocked on competition as well as security grounds.
Takeover fears: As the row over the proposed acquistion by Nvidia escalated, the government said it ‘will not hesitate to investigate further and take appropriate action’
There are industry fears that should the deal go through then it could lead to price hikes and make markets less competitive. There are also worries about heavy job cuts at the company’s headquarters in Cambridge.
One source close to the situation said: ‘There are many companies in the industry that do not like the deal and have been providing feedback.’
Fast growing chip designer Graphcore has also publicly spoken out against the deal on competition grounds.
Chief executive Nigel Toon said: ‘The deal is bad for technology, it is anti-competitive and needs to be looked in depth.
‘It is bad for competition and bad for the industry.’
Helen McGill, a CMA spokesman, said: ‘We’re still receiving views on the deal and expressions of interest. A formal investigation hasn’t started yet and there is no fixed time.’
The European Union is also preparing to launch its own investigation into the proposed takeover, making it the fourth regulator worldwide to eye the deal.
Others to have begun their own investigations include the US Federal Trade Commission and officials in Beijing.
Arm’s largest customers are mostly based in the US, including Apple, Qualcomm and Broadcom. They rely on Arm’s technology and fear that when it falls under the control of Nvidia, their competitor, they will be disadvantaged.
In October Jensen Huang, Nvidia’s chief executive, rejected these concerns. He said: ‘I can unequivocally state that Nvidia will maintain Arm’s open licensing model. We have no intention to ‘throttle’ or ‘deny’ Arm’s supply to any customer.’
Insiders believe the demanding regulatory hurdles make it more likely the deal will be scuppered amid hopes Arm could return to the London stock market.
But despite the increased scrutiny, Nvidia said it was sticking by the deal, adding that gaining regulatory approval was always likely to be a long process.
A spokesman said: ‘It always takes several months to clear a major transaction. We said in September when we completed the deal it would take 18 months. We are confident we can maintain approvals.’