Nvidia's $40 Bln ARM Acquisition Under Threat

Nvidia Corporation's (NVDA) $40 million bid to acquire UK-based semiconductor producer ARM is under threat as the UK government is assessing the possibility of monopoly in the market.

Since the announcement of the deal in September, major semiconductor buyers around the world have been vocal against the deal as it will create a monopoly which will reduce the bargaining power of buying companies.

Then Digital Minister of the country, Oliver Dowden had written to the Competition and Markets Authority, the British counterpart of the SEC in the US, to investigate the transaction due to potential security risks arising from a consultation it will launch to gather third-party views. As a result, CMA had announced in January that it will investigate the deal.

The CMA submitted their report to Dowden on July 20 and it is in the hands of Dowden to take the final decision. As per reports, the government is currently inclined to block the deal over serious national security concerns, as per Bloomberg.

According to CNBC, an Nvidia spokesperson said, "We continue to work through the regulatory process with the U.K. government. We look forward to their questions and expect to resolve any issues they may have." The deal was initially meant to conclude before March 2022 but due to the growing blockades, the agreement has been postponed till September.

Apart from the UK, Chinese and European authorities are also investigating the matter. In a report published by Financial Times, Chinese antitrust lawyers also think that the probe will push the deal beyond the primary headline while the European regulators want to start with their part in the investigation after the summer holidays. With all these obstructions, it can be feared that the deal might be off the table.

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