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Nvidia Will Acquire All Of Arm's Shares
Through the sale, Nvidia will acquire all of Arm's shares for a mix of cash and shares, Softbank announced in the morning.
Yazar: Tom Roberts
Yayınlanma: 15 Eylül 2020 01:27
Güncellenme: 19 Kasım 2024 04:53
Nvidia Will Acquire All Of Arm's Shares
Through the sale, Nvidia will acquire all of Arm's shares for a mix of cash and shares, giving Softbank and its Vision Fund a stake in Nvidia between 6.7 and 8.1 percent, Softbank announced in the morning. Softbank bought Arm four years ago for around $ 32 billion and took it off the stock exchange. Now the Japanese company is getting Nvidia shares valued at $ 21.5 billion and $ 12 billion in cash. Softbank can later get another $ 5 billion in cash or stock if certain earnings targets are met. Nvidia is also issuing shares worth $ 1.5 billion to the poor workforce.Approval of the antitrust authorities required
However, the takeover still requires approval from competition watchdogs in the US, the European Union, China and the UK. The companies expect a period of 18 months. Arm itself does not make computer chips. Rather, it issues licenses for the technology behind it. The basic architecture of the chips, which are used in practically all smartphones and the vast majority of tablet computers, comes from Arm. On the basis of the Arm designs, Apple and Samsung, among others, develop the processors for their smartphones. The chip company Qualcomm, whose processors are in many Android phones, also uses it. The Arm architectures prevailed in smartphones against chip systems from the semiconductor giant Intel - among other things because they work significantly more energy-efficiently. Now the technology is about to jump into the PC market: Apple is converting its Mac computers to Arm technology, and a first model is expected this year.Quantum leap from Nvidia
The takeover is a quantum leap for Nvidia. The company, which was only founded in 1993, is known for its graphics chips that are used in video games. The software developed by Nvidia can also be used very well for machine learning and artificial intelligence. The company is now also developing computers for driver assistance systems in cars and autonomous driving.
The new business has given the Nvidia business a new boost. Sales soared by 50 percent in the most recent fiscal quarter alone. The share price has more than doubled since the beginning of the year, and almost quadrupled since 2019. This means that Nvidia is currently worth almost 300 billion dollars, more than its venerable competitor Intel, which weighs 211 billion dollars.
License model should stay
By comparison, in 2016, when Arm was acquired by Softbank, Nvidia's market capitalization was just $ 31 billion, roughly the same as Arm's purchase price. These numbers illustrate the huge leap in development Nvidia has made in recent years.
It is still unclear what exactly Nvidia is up to with Arm. Group boss Jensen Huang assured that Arm's license model would be retained. At the same time, Nvidia also wants to offer its graphics technology via the arm platform. Nvidia also stressed Arm's headquarters should remain in the UK - and expand to include research in robotics, autonomous driving and healthcare.
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