Why NVDA Falls?

Miaka
2021-09-09

Nvidia asks EU to approve Arm deal. A ruling is due next month

The European Union is set to rule in October on Nvidia's $40 billion plan to buy the chip technology maker Arm, marking another regulatory milestone to be passed before the deal can go through.

Shares of $NVIDIA(NVDA.US)$ fell 1.4% to $223.39 in Wednesday trading.

The EU has set Oct. 13 as the deadline to make a ruling on the plan to buy Arm, according to the Commission's website, after the company filed for regulatory clearance Wednesday. The request kicks off a 25-day preliminary review that could lead to a full-scale 90-day investigation if Nvidia doesn't offer concessions, Reuters has reported.

We are working through the regulatory process and we look forward to engaging with the European Commission to address any concerns they may have. This transaction will be beneficial to Arm, its licensees, competition, and the industry."

-Nvidia said in a statement.

The deal would upend the chip industry. It faces opposition from several large tech companies such as $Qualcomm(QCOM.US)$ and $Microsoft(MSFT.US)$, as well as a potential in-depth investigation from U.K. regulators. It also must receive approval in the U.S., and China, among other places.

Tuesday, the Financial Times reported that Nvidia also faces fresh opposition from within the EU itself and that concessions the chip company has offered weren't enough to assuage officials' concerns.

Owned by the Japanese investor SoftBank, Arm licenses intellectual property to the likes of $Apple(AAPL.US)$, $Amazon(AMZN.US)$, and others, allowing them to use its designs to make chips for mobile phones and computer processors. Arm's independence -- the fact that is doesn't make chips itself -- has long been central to its licensing process. Nvidia has vowed to keep it neutral.

Still, the U.K.'s Competition and Markets Authority has expressed concerns about how competition could be affected if Nvidia owns Arm, which is based in the U.K.. It also may block the deal on national security grounds.

Nvidia had initially said the deal would close in early 2022, but in a recent earnings call the company said completion of the deal would take longer. It didn't offer a fresh timeline.

The deal must be completed by September of next year, or Nvidia would have to pay SoftBank $1.25 billion.

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Comments

  • Miaka
    2021-09-09
    Miaka
    7. When it comes to trading, the decision of when to buy a stock can sometimes be easier than knowing when is the appropriate time to sell a stock. Due diligence and quality research ????????
  • Miaka
    2021-09-09
    Miaka
    2. When it comes to trading, the decision of when to buy a stock can sometimes be easier than knowing when is the appropriate time to sell a stock.
  • Miaka
    2021-09-09
    Miaka
    When it comes to trading, the decision of when to buy a stock can sometimes be easier than knowing when is the appropriate time to sell a stock.
  • Miaka
    2021-09-09
    Miaka
    1. Due diligence and quality research should inform your decisions about when to get in and out of trades, and allowing the price to catch up with the fundamentals can take some time.
  • Miaka
    2021-09-09
    Miaka
    4. Ignore the short term volatility and if you can load up on the dips. Good company will definitely rise in the long run so hold strong.
  • Miaka
    2021-09-09
    Miaka
    They are a very disruptive company with a good future ahead in an ever growing industry. Dont panic sell and be patient.
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