A move by SoftBank Group to sell its UK-based subsidiary Arm to Nvidia fell apart due to protracted regulatory obstacles, with the head of the chip design unit Simon Segars (pictured) stepping down.
In a joint statement, SoftBank and Nvidia cited regulatory challenges as the reason for terminating the deal, which reportedly would have been the semiconductor industry’s largest-ever takeover.
Rene Haas, president of Arm’s intellectual property group, succeeds Segars as CEO and will join the board as a director.
Arm will start preparing for a public offering within its fiscal year ending 31 March 2023.
Jensen Huang, Nvidia founder CEO, said Arm is at the centre of “the important dynamics in computing. Though we won’t be one company, we will partner closely with Arm”.
Missing out
As part of the agreement with Nvidia, SoftBank received a non-refundable $1.3 billion deposit, which it plans to recognise as profit in its fiscal Q4 2021 (ending 31 March).
Richard Windsor, founder of research blog Radio Free Mobile, wrote SoftBank is the big loser, since a rally in Nvidia’s share price means the more than $30 billion profit it would have booked from the sale has evaporated.
The deal was originally valued at $40 billion, but the sum drifted higher along with Nvidia’s share price because the chipmaker planned to use its stock as currency to finance part of the purchase.
Windsor added it is extremely unlikely the public market would afford Arm a valuation of around $70 billion, which is why SoftBank had been keen to close with Nvidia rather than go for an IPO.
Almost 17 months after announcing the deal, Nvidia had yet to win approval from authorities in the US, UK, China or Europe.
Arm was a publicly traded company before SoftBank acquired it and has long held a position of neutrality in the semiconductor industry by offering reference designs used by multiple chip manufacturers.
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