As expected, Nvidia and SoftBank Group Corp. (SBG) announced the final agreement under which Nvidia will acquire Arm from SBG and SoftBank Vision Fund as part of a $40 billion deal. Nvidia promises to maintain Arm’s open licensing model and licensee neutrality, and even supplement the list of intellectual property offered for licensing with its developments.
The acquisition is said to “combine Nvidia’s leading artificial intelligence computing platform with Arm’s extensive ecosystem to create a leading artificial intelligence computing company that accelerates innovation and enters large, fast-growing markets”.
Arm’s headquarters will remain in Cambridge. Moreover, Nvidia plans to develop Arm’s research and development presence in the UK, creating a new global Artificial Intelligence research center here. Nvidia will invest in Arm’s state-of-the-art Artificial Intelligence supercomputer, training centers for developers and an incubator for start-up companies.
Under the terms of the deal, which has been approved by the boards of directors of Nvidia, SBG and Arm, Nvidia will pay $21.5 billion in Nvidia common stock and $12 billion in cash, including $2 billion once the agreement is signed. In addition, SoftBank may receive up to $5 billion in cash or ordinary shares, provided certain financial indicators are met by Arm.
Thus, SoftBank will maintain its participation in Arm by holding shares of Nvidia, which is expected to be less than 10%. Another 1.5 billion dollars will be paid to Arm employees in the form of Nvidia shares. Also Nvidia plans to finance the monetary part of the deal from its own funds. Arm’s IoT Services group does not participate in the deal.
Of course, the transaction is subject to regulatory approval from the UK, China, the European Union and the United States. Its completion is expected in about 18 months.