The fact that ARM Holdings is being sold was discussed back in July. Apple was the original candidate for the acquisition of the holding. And it seemed to be a pretty good successor for the ARM business, as Apple scheduled the move from Intel CPUs to its own ARM-based processors.
Soon there was talk that NVIDIA could also compete for the tidbit, which would pay with money and its own shares. As soon as Hermann Hauser, the co-founder of ARM, found out about NVIDIA as a potential buyer of his brainchild, he spoke about it in negative terms.
He was trying to convey that the fundamental principle of the ARM business model is to sell (license) every developer. Since SoftBank Group Corp (the current owner of ARM) does not independently develop chips, it generally supported ARM’s position. If NVIDIA gets ARM, it will upset the established balance and later, the rest of the companies will have to look for an alternative to ARM.
After these concerns, rumors began to spread that the company, most likely, would not leave NVIDIA, but would be acquired by a consortium of companies in need of ARM.
But despite the fears of the company’s co-founder, the deal for ARM happened between SoftBank and NVIDIA.
And the companies agreed on a price of $ 40 billion, although the alleged amount of $ 52 billion for the sale of assets was originally agreed by the co-founder of SoftBank. Despite this, this deal is the largest event in history, one might say the deal of the century between the semiconductor tech giants.
Naturally, the amount of $ 40 billion will not go into “one hand”, but is divided into the following components:
- $ 12 billion is credited to the company’s account;
- $ 21.5 billion – equivalent in NVIDIA shares;
- $ 5 billion – payment for the goals set before ARM, when they are achieved;
- $ 1.5 billion – NVIDIA share equivalent for ARM employees.
The reason for refuting the speculation of the co-founder of ARM is an interview with Jensen Huang, CEO of NVIDIA, for Forbes magazine:
“With ARM, I want to spread NVIDIA technology across the huge ARM network. There is no point in changing the company’s licensing model. ”
Bloomberg mentioned that the influx of new customers is important for Huang, so he is buying a lot of assets and is not going to take serious steps to change the operating model of the same ARM, which will lead to massive losses among clients.
ARM was acquired by SoftBank Group Corp in the 16th century of the 21st century for a whopping $ 31 billion, which at the time turned out to be the largest transaction in history in the memory of Europe for the IT sector. At the moment, ARM Holdings is a structural part of the Vision Fund controlled by SoftBank with a capital of $ 100 billion.Since 2017, the fund has invested in NVIDIA and was a fairly large shareholder of the company. But in early 2019, for $ 3.6 billion, the fund sold all NVIDIA shares, citing their fall.
Since NVIDIA has decided to take such a step, it must understand that the antimonopoly committee has ensured the verification of the company in the strictest form. After all, ARM licenses manufacturers such as Apple, Intel, Qualcomm, Samsung, TSMC, NVIDIA, Samsung and other developers of the semiconductor industry. It becomes a monopoly, so NVIDIA needs a ton of clearances from the antitrust committee to complete the deal.