In response to the announcement that Nvidia Corp. (Nvidia) has terminated its proposed acquisition of Arm Ltd. (Arm) from SoftBank Group Corp., FTC Bureau of Competition Director Holly Vedova issued this statement:
“More than two months into its litigation with the FTC, Nvidia this week announced that it would abandon its acquisition of Arm. The termination of what would have been the largest semiconductor chip merger will preserve competition for key technologies and safeguard future innovation. This result is particularly significant because it represents the first abandonment of a litigated vertical merger in many years. I am grateful to the FTC team for their outstanding work on the investigation and litigation. I also want to express my appreciation for the cooperation between FTC staff and competition agencies in the European Union, United Kingdom, Japan, and South Korea.”
On December 2, 2021, the Commission voted to file an administrative complaint to block the proposed transaction. The FTC complaint charged that the acquisition would harm competition in three worldwide markets in which Nvidia competes using Arm-based products: (1) processors for High-Level Advanced Driver Assistance Systems for passenger cars; (2) DPU SmartNICs, which are advanced networking processor products used to increase the security and efficiency of datacenter servers; and (3) Arm-based CPUs for cloud computing service providers. The complaint also alleged that the acquisition would have harmed competition by giving Nvidia access to the competitively sensitive information of Arm’s licensees, some of whom are Nvidia’s rivals, and by undermining the incentives for innovations that conflicted with Nvidia’s business interests, among other allegations. The administrative trial was set to begin on August 9, 2022.
Upon termination of the proposed transaction with Nvidia, Softbank and Arm announced plans for an initial public offering of Arm, citing forecasts of “both record revenues and record profits for this year” and “a very highly profitable and cash-generative business” that will “continue to innovate for our customers, which is what Arm has always done and we will do on an accelerating basis going forward.”