Nvidia To Buy Chipmaker Arm From SoftBank For $40 Bln

Nvidia Corp. (NVDA) said Sunday that it will acquire chipmaker Arm Limited from SoftBank Group Corp and the SoftBank Vision Fund in a deal worth $40 billion.

As per the terms of the deal, Nvidia will pay to SoftBank a total of $21.5 billion in Nvidia common stock and $12 billion in cash, which includes $2 billion payable at signing.

In addition, SoftBank may receive up to $5 billion in cash or common stock under an earn-out construct, subject to satisfaction of specific financial performance targets by Arm.

Nvidia will also issue $1.5 billion in equity to Arm employees.

Nvidia plans to finance the cash portion of the transaction with balance sheet cash. The transaction does not include Arm's IoT Services Group.

Nvidia expects that the transaction will be immediately accretive to its non-GAAP gross margin and non-GAAP earnings per share. It expects to complete the deal in about 18 months.

SoftBank will remain committed to Arm's long-term success through its ownership stake in Nvidia, expected to be under 10 percent.

Nvidia said that Arm will remain headquartered in Cambridge. Nvidia intends to retain the name and strong brand identity of Arm and expand its base in Cambridge. Arm's intellectual property will remain registered in the U.K.

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