Nvidia Close to Acquiring SoftBank’s Chip Company Arm for $40B, Report

SoftBank may announce the sale of Cambridge, U.K-based chip designer Arm Holdings to Nvidia Corp. (NASDAQ: NVDA) as early as next week, says The Wall Street Journal, citing sources familiar with the matter.

According to the report, the cash-and-stock transaction currently being negotiated would value Arm in the low $40 billions.

The report noted that the terms under discussion would mark a big win for the SoftBank Group Corp., which acquired Arm in 2016 for $32 billion.

Known for designing microprocessors that power most of the world’s smartphones, Arm was initially shopped by SoftBank to Foxconn, Qualcomm, and TSM. The Japanese technology conglomerate reached out to Samsung and iPhone maker Apple as well to see if they would be interested in acquiring it.

However, Nvidia seems to have pulled ahead of its rivals in the race to acquire the British chip designer. Arm has been in exclusive talks with Nvidia for several weeks, the Journal said.

The transaction would be one of the largest ever in the $400 billion semiconductor space, assuming it isn’t derailed at the last minute. It comes just two months after semiconductor manufacturer Analog Devices Inc. bought Maxim Integrated for $22 billion.

NVDA Price Action

Nvidia lost $5.89, or 1.20%, by the close of trading Friday and changed hands at $486.58, bringing the stock’s year-to-date and year-over-year gains to about 107% and 168%, respectively. SoftBank (SFTBY) shares traded higher by more than two percentage points at $27.50 by the close of trading Friday.

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