SoftBank's sale of Arm to US chipmaker Nvidia collapses: Report

The deal has faced several regulatory hurdles, with the US

SoftBank’s $66-billion sale of UK-based chip business Arm to Nvidia collapsed on Monday after regulators in the US, UK and EU raised serious concerns about its effects on competition in the global semiconductor industry.

Britain’s Arm, which chose Rene Haas to replace Simon Segars as CEO on Tuesday, said it would go public before March 2023 and SoftBank CEO Masayoshi Son indicated that would be in the US, most likely the Nasdaq. SoftBank acquired Arm, whose technology powers Apple’s iPhone and nearly all other smartphones, in 2016 for $32 billion.

“It (Arm) had the rare hallmarks of a SoftBank investment turning to gold, but instead Arm will head back for listing in financial markets where tech stocks have been seriously tarnished of late,” Hargreaves Lansdown analyst Susannah Streeter said.

The cash-and-stock deal with Nvidia was announced in 2020, but the US Federal Trade Commission sued to block it in December. The buyout also faced scrutiny in Britain and the European Union and had yet to receive approval in China, which has previously withheld approval of cross-border chip acquisitions.

The value of the sale, which depended on Nvidia’s stock price, was originally pegged at about $40 billion but rose with Nvidia’s stock price to about $80 billion late last year, though the California company’s stock has fallen since.

New Arm CEO steps into centre of chip turmoil (Bloomberg)

Arm Chief Executive Officer Rene Haas has a formidable to-do list to go with his new job. Ending a troubled sale process that’s kept the chip designer mired in uncertainty will help refocus the firm, Haas said. While Arm has financially never performed better, his first challenge is to fire up its employees.  

“It’s going to be taking a company that’s been in stall mode because of the Nvidia acquisition and getting us reinvigorated to move forward,” Haas said. “It’s been hard for employees at many companies and then you layer on the uncertainty we’ve had.”  

Arm’s designs and technology are ubiquitous, playing key roles in everything from the most powerful data centre chips to Apple iPhones and right down to tiny sensors used in home appliances.