UK government considers blocking Nvidia’s takeover of Arm

Officials are said to be responding to a recent investigation from the Competition Markets Authority

Trade

(Image: ARM)

4 August 2021

The UK government is considering blocking Nvidia’s £30 billion acquisition of Arm over concerns about national security and market competition, according to sources familiar with the matter.

Officials are said to be basing their decision on unfavourable findings from the Competition and Markets Authority’s (CMA) investigation of the deal, the sources told Bloomberg.

The regulator had launched an investigation into the acquisition earlier this year, with secretary of state for Digital, Culture, Media & Sport (DCMS) Oliver Dowden issuing a Public Interest Intervention Notice (PIIN) in April, the results of which were delivered to DCMS on 20 July.

“Any decision on whether the transaction operates, or may be expected to operate, against the public interest is taken by the Secretary of State for DCMS,” the CMA stated.

According to Bloomberg’s sources, the consumer watchdog’s report reveals some concerning implications for the UK’s national security, the details of which weren’t specified.

The deal was previously criticised for being potentially harmful to Arm’s independence as well as the UK market, with the majority of UK-based IT experts holding the opinion that the government should intervene in the acquisition.

However, before the deal is potentially blocked, the UK government will likely conduct a further investigation into the merger’s implications.

Nvidia was not immediately available for comment, but had previously told Reuters that it’s cooperating with the UK government:

“We look forward to their questions and expect to resolve any issues they may have,” said an Nvidia spokesperson.

In July, the company submitted applications to Chinese regulators to review the deal, with the Financial Times suggesting it could take up to 18 months for them to be processed.

In the meantime, incoming Qualcomm chief executive Cristiano Amon told The Telegraph that, if Nvidia’s Arm acquisition falls through, Qualcomm would be prepared to take a stake in the Cambridge-based company alongside Amazon and car manufacturer Tesla.

“If it moves out of Softbank and it goes into a process of becoming a publicly traded company, [with] a consortium of companies that invest, including many of its customers, I think those are great possibilities,” Amon told the publication. “We will definitely be open to it, and we have had discussions with other companies that feel the same way.”

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