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Nvidia admitted that its acquisition plan for the British chip design company Arm is unlikely to be completed within the 18 months it stipulates because it faces a protracted global regulatory investigation.
However, CEO Huang Renxun said that the US chip manufacturer was “confident” that the regulator would approve the transaction, but the transaction was opposed by other chip companies that rely on Arm design.
Nvidia did not submit Formal application According to local lawyers, 8 months after the announcement of the transaction, that is, before June, the investigation time of the Chinese antitrust regulator may be extended to 18 months.
At the same time, Nvidia is facing prolonged antitrust review and questioning the impact of British national security, and the transaction has become a political symbol of the country’s loss of corporate influence when facing foreign acquisitions.
“Our discussions with the regulator are longer than originally thought, so it is delaying the timetable,” Huang said in an interview with the Financial Times. “This is not a specific regulatory agency,” he said of the expected delay. “But we are full of confidence in this transaction, and we believe that regulators should recognize the benefits of this acquisition.”
Due to the surge in demand for its chips from gamers, cloud data centers, and cryptocurrency miners, Nvidia announced stronger-than-expected financial results, so the news may be delayed. Despite news that it is expected to be delayed, its share price has risen by more than 2% in after-hours trading.
China’s protracted antitrust review Cause a crash Three years ago, when a large chip transaction involving US buyers was involved, the technological tension between the United States and China rose sharply. Qualcomm withdrew from the $44 billion acquisition of NXP after failing to obtain approval within 18 months allowed by the two companies and extending it for three months.
Nvidia has always insisted that it will complete the transaction deadline before March. Huang said that its agreement with Japanese conglomerate SoftBank will enable it to complete the acquisition before the end of 2022. When asked if he thinks it will obtain regulatory clearance before then, he said: “We hope so.”
The opposition of the chip industry and delays in supervision have led people to speculate that SoftBank may eventually choose to list Arm instead of trying to continue the full sale. Since the announcement of the transaction in September, the Philadelphia Semiconductor Index has risen 55%.
In contrast, Nvidia’s cash and stock agreement quotations increased by 41%, reaching 54.3 billion U.S. dollars, and part of the payment was linked to Arm’s business performance after completion.
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