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UK regulators consider blocking M & A deals NVIDIA joins arm to counter

Share with friends and circles of friends with wechat scanning QR code < / P > < p > on January 12, the British anti competition regulator is considering preventing NVIDIA from spending $40 billion to acquire arm, a British chip design company. The two companies submitted written documents on Tuesday to fight back. They explained the reasons why the transaction should be approved, and accused regulators of ignoring arm's financial situation and exaggerating arm's market power < p > the deal was announced in September 2020. Softbank, NVIDIA and arm were expected to complete within 18 months (i.e. before March 2022), but now it seems that they may miss this deadline. At present, regulators in the United States, Britain and Europe are paying close attention to the transaction. They are worried that the move may reduce competition. Alan Priestley, an analyst at Gartner, a market research firm, and other investors said there was a high possibility that one or more regulators would block the deal < p > however, NVIDIA and arm have not given up. In a 28 page written document submitted to the UK competition and Markets Authority (CMA), the two semiconductor giants outlined the reasons why the transaction should be approved. They accused critics of the deal of "romanticizing" arm's history, ignoring the company's current financial situation and exaggerating arm's current market power Arm is widely regarded as a star enterprise in the British technology industry. It was spun off from an early computing company called acorn computer in 1990. The company's energy-saving chips are designed for 95% of global smartphones and 95% of chips designed in China. Arm has licensed its chip designs to more than 500 companies that use them to make their own semiconductors. In 2016, the company was pocketed by Softbank with $32 billion < p > critics worry that the merger with NVIDIA, which independently designs chips in-house, may limit the use of arm's "neutral" semiconductor design, and may lead to higher prices, fewer choices and less innovation in the industry. But NVIDIA argued that the deal would bring more innovation and that arm would benefit from increased investment < p > Nadine Dorries, the British Minister of figures and culture, ordered a "phase II" investigation into the transaction last November. The investigation, conducted by CMA for 24 weeks, will investigate antitrust concerns and national security issues related to the transaction. The submissions submitted by NVIDIA and arm never mentioned safety issues < p > in addition, the US Federal Trade Commission (FTC) filed a lawsuit on antitrust grounds in December 2021 to block the transaction. The EU executive committee, the EU executive body, announced an in-depth investigation into the transaction in October of the same year < p > Margrethe vestager, executive vice president of the European Commission, said in a statement: "Although there is no direct competitive relationship between arm and NVIDIA, arm's intellectual property rights are an important investment in competing products with NVIDIA, such as data center, automobile and Internet of things. Our analysis shows that NVIDIA's acquisition of arm may lead to the restriction or degradation of access to the latter's intellectual property rights, which will have a distorting effect in many markets using semiconductors." < p > in the submission, NVIDIA and arm tried to refute the view that the transaction might affect competitors' access to arm's key technologies. They wrote: "This theory can't stand scrutiny. Trying to cancel the redemption right of the arm Licensor will immediately reduce arm's license income and immediately damage NVIDIA's investment interests. Any rational listed entity will not accept this self defeating strategy. < / P > < p > some critics suggest that Softbank should list arm instead of selling the Cambridge based company to NVIDIA. However, both NVIDIA and arm claim that the acquisition is the best choice on the negotiation table, and the initial public offering (IPO) will bring greater pressure to arm, including requiring it to "narrow the scope of attention and limit investment" < p > the two companies wrote in the submission: "in the media, opponents of the transaction urged CMA to block the transaction so that arm can be listed. They believe that the listing will be launched on the London Stock Exchange (LSE) in the UK. They equate the popularity of arm with high valuation and success, but they can't be emotional in the stock market. The capital market requires profitability and performance." < p > the document states: "Softbank considered IPO in 2019 and 2020, but finally chose to give up, because listing will not bring necessary return on investment to Softbank. Although ARM technology licensors (such as apple, Qualcomm and Amazon) Its revenue, profit and market value are soaring, but arm has recently experienced a situation of flat revenue, rising costs and declining profits, which may bring challenges to a listed company with a history of 30 years. Capital markets expect arm to make major strategic adjustments, including cost cutting, to maximize the value of arm. " (small) < / P > < p >


2023-03-22 10:04:49

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