The Federal Trade Commission is suing to prevent NVIDIA from acquiring ARM for $40 billion.
NVIDIA and Softbank agreed to the deal in September of 2020, but regulators in the U.K., EU, China and now the U.S. have all raised concerns. NVIDIA had originally hoped to close the deal in 2022, but that seems to be in serious jeopardy now.
The FTC’s primary concern is that the merger would compromise ARM’s neutrality in the chip industry. NVIDIA would also gain substantial leverage against many of its competitors and ARM could be less inclined to innovate in ways that challenge NVIDIA, according to the suit.
For its part, NVIDIA doesn’t appear fazed by the suit. “As we move into this next step in the FTC process, we will continue to work to demonstrate that this transaction will benefit the industry and promote competition,” the company said in a statement.
When you’re intent on closing the largest deal ever in the semiconductor industry, projecting confidence is a must. Interestingly, investors never really seemed to think that the deal would be allowed to go through.
Barron’s reports that Citibank analysts currently have the odds of the deal closing at somewhere between 5 and 30%.
That’s understandable given the fact that U.K. regulators have raised national security concerns over the deal. The EU launched its own investigation into the deal late October, citing serious competition concerns.
Chinese regulators raised objections back in June, and it’s believed that their process could take as long as 18 months to resolve.