The UK’s Competition and Markets Authority (CMA) will open an investigation into Nvidia’s acquisition of Arm. “The microprocessor industry runs in the billions and is critical to many products that we use very often in our daily lives,” said a Explanation, the general director of the CMA, Andrea Coscelli. With good reason, the arm chips provide a large part of the smartphones in circulation around the world today. Before the investigation is reopened, “the CMA asks interested third parties to give their opinion on the future takeover of Arm by Nvidia”.
In September 2020, Nvidia announced it would buy Arm for $ 40 billion. In collaboration with many of Nvidia’s competitors, the announcement gave cause for concern, particularly with regard to the neutrality of the licensing model. Arm’s co-founder, Hermann Hauser, was therefore concerned about the potential impact on the company’s economic model, as well as on employment and the country’s economic sovereignty. He also created the website Rearearm – Save Arm – collects signatures to prevent redemption. According to the website, 2,000 signatures had been received as of October 12, 2020.
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Arm is considered one of the flagships of the UK economy. Of the 6,500 employees, 3,000 are in the UK. In the previous takeover of Arm by the Japanese conglomerate SoftBank, the United Kingdom ensured that jobs in its country were secured. However, this problem does not fall within the competence of the CMA. On this point, while Nvidia has promised to increase its workforce in the UK, it has agreed to keep Arm’s headquarters in Cambridge.
Arm’s general manager Simon Segars confided in December CNBC that they expected the authorities to “carefully examine” the deal. Because of this, the two companies have announced that they hope to finalize the deal in early 2022 in order to meet regulatory controls from the US, European Union and China. “We will work closely with other competition authorities around the world to carefully examine the impact of the deal and ensure that it ultimately does not lead to consumers confronted with more expensive or inferior products,” explains Andrea Coscelli.
“It’s a long process. There is a lot of discussion with regulators to get the information we want, ”says Simon Segars. This is not the first obstacle that has crept into the acquisition since Nvidia’s announcement by Arm. In November, Arm’s acquisition of Nvidia blocked ARM’s Chinese joint venture because of a conflict of interest related to the firing of its CEO, Allen Wu.