The Japanese SoftBank Group announced on Monday the sale for 40 billion dollars of its British subsidiary Arm, a world giant of microprocessors, to the American Nvidia, champion of graphics cards, without raising questions about the evolution of its business model .
This mega-acquisition is expected to be finalized by March 2022, subject to the approval of numerous regulatory authorities around the world.
Nvidia will pay more than half ($ 21.5 billion) with its own shares.
The price of $ 40 billion is a maximum amount because the payment of a tranche of $ 5 billion, payable either in cash or in Nvidia shares, will be conditioned "on the achievement by Arm of specific financial performance objectives" , said the American group.
SoftBank Group is expected to own between 6.7% and 8.1% of Nvidia's capital after the transaction.
It is one of the largest global mergers and acquisitions announced since the beginning of the year, and which promises to make Nvidia a juggernaut in the semiconductor sector.
Founded in 1990 in England, Arm is a microprocessor specialist with an overwhelming global market share in smartphones.
But its chips, manufactured under license, are also found in countless sensors, connected objects and cloud services (remote computing).
Nvidia, whose graphics cards are particularly widely used by the video game industry, has seen its sales skyrocket since the coronavirus crisis.
Its products are also increasingly present in artificial intelligence and data centers.
- SoftBank takes off on the stock market-
SoftBank Group bought 100% of Arm in 2016 for around $ 31 billion.
He initially planned to reintroduce Arm to the stock market, but said on Monday that the deal with Nvidia should "better realize Arm's potential" while creating more value for its own shareholders.
"Arm has underperformed" under the leadership of SoftBank Group, Amir Anvarzadeh, strategist at Asymmetric Advisors based in Singapore, told AFP on Monday.
The sale to Nvidia "will raise eyebrows" to large global semiconductor players, as their partnerships with Arm could now be compromised, the American group being one of their competitors.
"They will need guarantees" or even could ask to be associated with the acquisition of Arm, added Mr. Anvarzadeh.
SoftBank Group shares, which had suffered greatly last week, jumped 10.25% to 6,461 yen around 4:15 GMT on the Tokyo Stock Exchange.
Its take-off was also linked to speculation in the press that SoftBank Group would consider buying back all of its outstanding shares and thus quitting the Tokyo Stock Exchange.
Exiting the listing would offer fewer constraints to the group in terms of transparency of its accounts, while it is in the process of evolving more and more towards a pure investment company.
- "Speculator" without genius -
SoftBank Group initiated this spring a mega-program of asset disposals to strengthen its liquidity and finance huge buybacks of its own shares.
It has significantly reduced its presence in telecoms, having sold significant stakes of its shares in T-Mobile US and SoftBank Corp, its Japanese mobile telephone subsidiary.
He also monetized part of his shares in Chinese e-commerce giant Alibaba, using them as collateral to borrow.
But a new strategic shift by SoftBank Group is also worrying its shareholders: rather than focusing mainly on start-ups, the group is now investing in technological champions already listed on the stock market.
According to several media, SoftBank Group would have invested tens of billions of dollars in American technology stocks in the form of equity derivatives, which would have influenced the surge of the Nasdaq index this summer.
The decline in the Nasdaq since early September has cast doubt on the merits of such a bet, especially as SoftBank Group remains silent for the moment on the details of its recent stock market operations.
For some observers, SoftBank Group is turning into a giant hedge fund, with highly unpredictable consequences far beyond its own perimeter.
Masayoshi Son, the emblematic CEO of the Japanese group, "is not a genius, but a speculator" who has lost much of his credibility after a series of bitter failures, according to Mr. Anvarzadeh.
"When there is a tech bubble, it's never very far."
© 2020 AFP