Japanese SoftBank announced on Monday the sale for up to $ 40 billion of its British subsidiary Arm, a global microprocessor giant, to the American Nvidia, champion of graphics cards, which bought it at a high price to take advantage of advance in the technologies of the future, with artificial intelligence in mind.
This mega-acquisition should be finalized by March 2022, subject to the approval of numerous regulatory authorities around the world, and in particular the British, who view with suspicion the change of owner of this happy national technology.
The UK government argued that it was aware of Arm's "vital role in the technology sector" and the economy in the UK.
He is reviewing this transaction "including its impact on Cambridge head office", with the possibility of "taking appropriate action".
One of Arm's co-founders, Hermann Hauser, said he was "extremely worried" that the company has gone under the American flag even though it is "the last remaining in the UK with a position dominant in mobile telephony and microprocessors ".
According to him, the takeover would only worsen the domination of American technology, as shown by the power of giants like Apple, Amazon or Facebook.
"The sale of Arm to Nvidia will destroy its business model of being the" Switzerland of the microprocessor industry "by acting equally towards its 500 licensees, Mr. Hauser said in a letter to the Prime Minister. However, "most of them are competitors of Nvidia" and several are British companies, notes Mr. Hauser.
Without giving any guarantees on the 3,000 employees in the United Kingdom (out of 6,500 in the world), Nvidia promises to keep Arm's headquarters in Cambridge and wants to build an "artificial intelligence supercomputer" as well as its "hub there. European".
Nvidia boss Jensen Huang also assured in a letter to his employees that he would "maintain Arm's neutrality" vis-à-vis its customers as well as its open license model.
Founded in 1990 in England, Arm is a microprocessor specialist with an overwhelming global market share in smartphones (95%).
But its chips, manufactured under license, are also found in countless sensors, connected objects and cloud services (remote computing).
Nvidia is paying a high price to ramp up in artificial intelligence, connected objects and 5G, Arm's strengths.
It is one of the largest global mergers and acquisitions announced since the start of the year and one of the largest ever in the microprocessor sector, and which propels Nvidia to the rank of juggernaut in the sector.
The American will pay more than half ($ 21.5 billion) with his own shares.
The price of $ 40 billion is a maximum because the disbursement of a tranche of $ 5 billion will be conditioned "on the achievement by Arm of financial performance targets".
SoftBank Group should keep between 6.7% and 8.1% of the capital.
Nvidia, whose graphics cards are particularly widely used by the video game industry, has seen its sales skyrocket since the new coronavirus crisis.
Its products are also increasingly present in artificial intelligence and data centers.
SoftBank Group bought Arm in 2016 for around $ 31 billion.
He initially planned to take the company back to the stock market, but said on Monday that the deal with Nvidia should "better realize Arm's potential."
"Arm has underperformed" under the leadership of SoftBank Group, Amir Anvarzadeh, strategist at Asymmetric Advisors based in Singapore, told AFP on Monday.
According to press speculations, SoftBank Group would consider buying back all of its outstanding shares, in particular thanks to the income from this mega-sale and thus leaving the Tokyo Stock Exchange, bringing an old project up to date.
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.
SoftBank Group initiated a mega-program of asset sales this year to strengthen its liquidity and finance huge buybacks of its own shares.
But a new strategic shift by SoftBank worries its shareholders: rather than focusing mainly on start-ups, the group is now investing in technological champions already listed on the stock market.
He 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, according to several media.
The withdrawal of the Nasdaq since early September has cast doubt on the merits of such a bet.
© 2020 AFP