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UK government considers stopping acquisition of Arm by Nvidia

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The UK is considering blocking Nvidia’s acquisition of Arm due to potential national security risks, Bloomberg sources said.

Nvidia announced its acquisition of Arm for $40 billion (EUR 33.8 billion) in September last year. Last April, however, Britain’s Secretary of State for Culture, Oliver Dowden, asked the Competition and Markets Authority (CMA) to investigate the takeover. Dowden expects a report from the British competition authority, which will look at the extent to which the deal could be anticompetitive. In addition, the watchdog also had to report objections from third parties concerning national security.

Worrying National Security Implications

Based on the reports, which were delivered at the end of July, England is considering stopping the takeover. The reports would have worrying implications for national security, a source familiar with the discussion said. According to another source, the British government is likely to launch a more in-depth investigation. The sources indicate that no final decision has been made now. The UK could still approve the acquisition of Nvidia under certain conditions.

“We continue to work on the regulatory process with the UK government,” an Nvidia representative said. “We look forward to their inquiries and expect to resolve any issues they may have.”

Shares Nvidia

While issues in acquisitions can often negatively impact a company’s stock, Nvidia’s stock has remained stable. Shares of Japan’s SoftBank Group Corp., which currently owns Arm, fell 1.5 percent on the Japanese stock exchange on Wednesday. Anand Srinivasan, a BI senior semiconductor industry analyst, said that “if regulators do stop the deal, it will hamper Nvidia’s ability to dominate the computer chip market. However, we believe investors had low expectations from the outset regarding the deal’s completion.”