The deal, announced on Sunday, will be funded through a mix of cash and shares, the companies said in a joint statement.
Nvidia said on Sunday it plans to keep Arm’s Cambridge headquarters, as well as expand its campus with a new research facility.
“ARM’s business model is brilliant. We will keep its licensing model open and customer neutral, serving customers in any industry, around the world, and further expand the [intellectual property] license portfolio, “Huang wrote.
The deal is likely to be under significant scrutiny in the UK, where some politicians worry about preserving jobs at ARM. Nvidia’s rivals, who buy chip designs from ARM, are also likely to object.
The prime minister’s official spokesperson said on Monday that the British government would not hesitate to investigate any acquisitions that could have a major impact on the country.
Another asset sale for SoftBank
“The combination is likely to raise SoftBank’s share price in Tokyo,” Jeffrey Halley, senior market analyst for Asia Pacific at Oanda, wrote in a note to clients.
Under the deal, Nvidia will pay out approximately $ 12 billion in cash and $ 21.5 billion in shares. SoftBank will receive a less than 10% stake in Nvidia, and the Japanese company will also be eligible for a payment of up to $ 5 billion if ARM meets “specific financial performance targets,” according to SoftBank. The company has not disclosed the objectives.
The deal is expected to close within 18 months. It will first have to pass regulatory approvals from the UK, the European Union, the US and China.
– Luke McGee and Charles Riley contributed to this report.