Nvidia’s acquisition of Arm for $40 billion makes it the biggest semiconductor deal ever. Nvidia will finance the deal in a mix of cash and stock. Nvidia CEO Jensen Huang says that the acquisition will help the maker of graphic processors for computer games and self driving cars expand to Ai computing, as well as engage in advance computing, from smartphone’s and PCs to Robotics, 5G and IOT.
Transaction details from a joint statement show that Nvidia will pay $ 2 billion upon signing and another $10 billion in cash. The company will also issue 44.3 million shares worth $ 21.5 billion in common stock as apart of the payment. The cash portion of the transaction will come from the company’s balance sheet. Nvidia says that Softbank may also pay up to $ 5 billion in cash or common stock “under an earn-out construct, subject to satisfaction of specific financial performance targets by Arm.”
Arm employees will receive $1.5 billion in equity from Nvidia.
What the Nvidia Arm Acquisition means for SoftBank
SoftBank is selling Arm only four years after it purchased the business, then valued at $32 billion. The deal will boost Mayasoshi Son’s liquidity, following an earlier offloading of $41 billion in assets to serve the company’s financial needs and buybacks.
However, the deal faces hurdles from UK policymakers who earlier cited concerns of public interest. CNBC earlier reported that UK’s opposition Labour Party is concerned that the acquisition would move over 3,000 UK jobs to overseas.
The transaction will take place in 18 months, subject to approvals including consent from the UK government.
Son’s company will maintain less than 10% ownership of Arm after the acquisition.