Nvidia Agrees to Buy Chip Designer Arm for $40 Billion
Nvidia officially confirms a massive $40 billion deal to acquire Arm Holdings from SoftBank. The transaction combines two major chip industry players and faces a lengthy regulatory approval process.
Nvidia confirms its intention to purchase chip design giant Arm Holdings from SoftBank for a total of up to $40 billion. The boards of Nvidia, SoftBank, and Arm all approve the outline of this massive transaction, which pays SoftBank $2 billion in cash upfront, $10 billion in cash at closing, and $21.5 billion in Nvidia stock. An additional $5 billion earn-out depends on future performance, while $1.5 billion covers equity compensation for Arm's over 6,000 employees.
The acquisition excludes Arm's Internet of Things division and requires extensive regulatory and antitrust approvals across the United States, the United Kingdom, China, and the European Union. Because of these complex international requirements, the deal expects to take approximately 18 months to close. To ease concerns surrounding Brexit, Nvidia promises to expand Arm's Cambridge offices and establish a new global center of excellence for AI research at that campus.
This agreement provides immediate cash relief to SoftBank as the Japanese company works to clean up its balance sheet after recent financial losses. By taking a sizable stake in Nvidia stock, SoftBank also returns as a major investor in the GPU maker. The historic combination of Nvidia and Arm ultimately brings together two of the most powerful forces in the global semiconductor industry.