According to Reuters, Nvidia’s acquisition of processor licensor ARM is facing an expanded EU antitrust investigation. The report also valued the transaction at 54 billion U.S. dollars.
Reuters quoted an unnamed source as saying that the discount offered by Nvidia failed to address concerns that Nvidia, an ARM customer, would have an advantage over other licensees. The official deadline for the European Commission to end its preliminary review is now October 27, but it now appears that it will conduct a four-month investigation into the transaction. The report now also mentions a $54 billion transaction, which is a significant increase from the initial price of $40 billion.
The news of the European Commission’s extension of the investigation was released a few months after the UK decided to expand its investigation of transactions and include national security and competition considerations. Nvidia is believed to have made additional concessions to European authorities in maintaining ARM’s independence and maintaining competition.
The European Commission is now likely to go to Nvidia and ARM’s competitors and customers to solicit opinions in the next phase of the investigation. Many ARM licensees are believed to be opposed to the deal, although Broadcom, MediaTek and Marvell are said to support it. The transaction may also be subject to the approval of Chinese regulators. A previous major semiconductor transaction-Qualcomm’s acquisition of NXP Semiconductors-failed in 2018 when China remained silent because the transaction time had passed. Generally speaking, for this type of transaction, the longer the regulatory investigation, the less likely it is to complete it successfully.
