Arm aims for IPO as Nvidia calls off its bid

Nvidia has called off its acquisition of Arm from Japanese conglomerate SoftBank Group in the face of continuing regulatory hurdles to the controversial purchase. In response, Softbank has chosen to pursue a sale of the IP provider through an initial public offering (IPO) that the parent company expects to close within its financial year ending March 31st, 2023.

Nvidia and SoftBank first agreed to a purchase of Arm in September 2020 but the regulatory problems continued to mount as other licensees of the IP portfolio lobbied governments around the world to block the deal. A decision at the end of last year by the US Federal Trade Commission (FTC) to pursue legal action against the merger caused analysts to downgrade the chances of success dramatically. For example, the bank Citi moved from their previous position of expecting the deal to close to just a 5 per cent chance of success following announcement of the FTC action.

In terminating the deal, Nvidia will continue to pay the $1.25bn it offered to SoftBank to secure the initial agreement. The GPU maker will also retain the 20-year Arm licence it secured.

“Arm is at the center of the important dynamics in computing. Though we won’t be one company, we will partner closely with Arm… I expect Arm to be the most important CPU architecture of the next decade,” said Jensen Huang, Nvidia’s founder and CEO.

Current Arm CEO Simon Segars will step aside in the run-up to the IPO, with current head of the IP products group Rene Haas taking over the helm. Segars will remain on the Arm board and act in advisory role.

“Rene is the right leader to accelerate Arm’s growth as the company starts making preparations to re-enter the public markets,” said Masayoshi Son, SoftBank chairman & CEO.