SoftBank sells chip designer Arm to Nvidia in $40 billion deal
Nvidia will pay SoftBank $21.5 billion in shares and $12 billion in cash.
TOKYO/SAN FRANCISCO (Reuters) - SoftBank Group Corp said on Monday it has agreed to sell chip designer Arm to Nvidia Corp for as much as $40 billion in a deal set to reshape the semiconductor landscape.
The deal puts a vital supplier to Apple Inc and others across the industry under the control of a single player and will face potential pushback from regulators and Nvidia rivals.
Nvidia will pay SoftBank $21.5 billion in shares and $12 billion in cash, including $2 billion on signing. The deal will see SoftBank and the $100 billion Vision Fund, which has a 25% stake in Arm, take a stake in Nvidia of between 6.7% and 8.1%.
SoftBank could also be paid an additional $5 billion in cash or shares depending on the chip designer’s business performance, with Arm employees to be paid $1.5 billion in Nvidia shares.
The sale marks an early exit for SoftBank, four years after the $32 billion acquisition of the British chip technology firm. Chief Executive Masayoshi Son has lionised the potential of Arm but is slashing his stakes in major assets to raise cash.
SoftBank executives, frustrated at the group’s share performance, have held early stage talks about taking the Japanese technology group private, a source told Reuters. Those talks could gain momentum following the Arm sale.
The deal is subject to regulatory approvals including in Britain, the United States and China and is expected to close in March 2022.
With potential pushback looming, Nvidia CEO Jensen Huang emphasised he will retain Arm’s neutral licensing model and expand it by licensing out Nvidia intellectual property for the first time.
Nvidia said it will licence its flagship graphical processor unit through Arm’s network of silicon partners. It will build chips for devices like self-driving cars but also make its technology available for others.
The companies did not discuss the deal with the British government until shortly before the announcement because the talks were secret, Huang said. A new artificial intelligence research center will be built at Arm’s Cambridge headquarters.
“Cambridge is going to be a site of growth,” Huang said.
