Nvidia-ARM deal could be delayed and eventually terminated by the European Commission
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Nvidia’s initial plan for the ARM acquisition was to allow for 18 months in order to get approvals from all relevant regulators across the world, and hopefully finalize the deal by March 2022. Many industry analysts pointed out that this type of consolidation in the computer hardware world is most likely to have a negative impact, and regulators are always wary of detrimental outcomes. Thus far, Nvidia has not received any approval from regulators in the U.S., U.K., Japan or China, but the final and most important hurdle will come from the European Commission (EC). Surprisingly enough, Nvidia has not even submitted an application for the EC as of yet, and the entire process could see significant delays, forcing Softbank and ARM to reconsider an initial public offering.
Right now, the EC is on holiday until September, so Nvidia has some time to prepare all the necessary paperwork for the application. It usually takes the EC at least six months to review this type of deal, yet analysts close to The Telegraph believe that the process could be delayed well beyond March 2022. Nvidia was smart to include an optional extension to September 2022, but even that provision might not prove enough. On top of that, the U.K. and Chinese regulators appear to strongly oppose the deal.
Although an IPO would give all of ARM’s current customers peace of mind, this solution does not seem to serve the interests of Softbank and Nvidia. Team Green has already presented a plan to integrate ARM’s technology in future datacenter products, including the BlueField data processing units and the Grace processors, so it obviously needs a finalized deal ASAP. Softbank is also interested in having Nvidia as one of its largest shareholders, and ARM itself would rather focus on research and development instead of short-term gains, especially now that the British company has stopped hiring and cut certain employee bonuses.