Ministers under pressure to intervene in £30bn takeover of British chip-maker Arm Holdings to safeguard UK HQ as co-founder warns deal is an ‘absolute disaster’
- Arm has been snapped up by US rival Nvidia in a £31.2bn deal
- Nvidia boss said the Arm brand would be retained, it would continue to be based in Britain and additional staff would be hired
- But ministers are insisting on guarantees which would keep Arm’s HQ in Britain
- Arm’s co-founder Hermann Hauser said the deal was an ‘absolute disaster’
Ministers are under pressure to intervene in the £30billion takeover of British chip-maker Arm Holdings.
The Government was already facing calls from opposition MPs to prevent the new owners of Arm, Britain’s most valuable tech company, moving its headquarters abroad.
Now Tory figures are understood to be leaning on Business Secretary Alok Sharma to ensure Arm remains at its base in Cambridge, preserving thousands of British jobs.
Under pressure: Tory figures are understood to be leaning on Business Secretary Alok Sharma
Arm was snapped up by US rival Nvidia in a £31.2billion deal this weekend, just four years after it was bought by Japan’s Softbank.
When Softbank stumped up £24billion for Arm in 2016, Theresa May’s government insisted on guarantees which would keep its HQ in Britain. MPs are now urging Sharma to impose similar requirements on Nvidia, to prevent the UK losing its tech sector ‘crown jewel’.
But Nvidia chief executive Jensen Huang said in a statement that the Arm brand would be retained, it would continue to be based in Britain and additional staff would be hired.
Huang said: ‘Arm will remain headquartered in Cambridge. We will expand on this great site and build a world-class AI research facility, supporting developments in healthcare, life sciences, robotics, self-driving cars and other fields.’
His comments come as Labour MP Ed Miliband, shadow business secretary, said: ‘The Government should show leadership and seek legally binding assurances from Nvidia, should it take over the company, to keep Arm headquartered in the UK.’
Arm’s co-founder Hermann Hauser told BBC Radio that the deal was an ‘absolute disaster’
Arm’s co-founder Hermann Hauser said the deal was an ‘absolute disaster’.
‘I think it’s an absolute disaster for Cambridge, UK and Europe,’ he told BBC Radio 4.
‘Nvidia will destroy ARM’s business model. The business model of Arm is being the Switzerland of the semi-conductor industry, of dealing with over 500 licensees, most of which are competitors of Nvidia.’
Arm, which makes vital chips used in smartphones, employs around 3,000 UK workers and has 6,500 staff globally.
When Softbank bought the business four years ago, ministers heralded the deal as a vote of confidence in post-Brexit Britain.
But critics said the UK was allowing foreign investors to snap up its most promising companies.
Labour Party’s Ed Miliband has urged the Government to obtain ‘legally binding assurances’ ARM would remain in the UK
Former City minister Lord Myners called the sale of Arm to Softbank a ‘tragedy’. He said last month that the UK should ‘introduce more legal and national protection around assets that we think are of significant importance’.
The Government can intervene in takeovers on national security grounds, and guidance cites examples of firms designing complex tech infrastructure, like Arm, among those that need protection.
Science and technology union Prospect also wrote to Sharma last week, urging him to stand up for Arm.
In a hint that ministers were considering restrictions, a Government spokesman said it was monitoring developments, adding: ‘Where we feel a takeover may represent a threat to the UK, the Government will not hesitate to investigate, which could lead to conditions on the deal.’
Monday’s dealmaking frenzy
The week has started with another two significant tie-ups.
Firstly, computer software company Oracle has won the bidding for TikTok’s US operations, a source told the Wall Street Journal.
A person familiar with the matter told the WSJ that Oracle will be announced TikTok’s ‘trusted tech partner’ in America – but added that it is unlikely to be an outright sale.
It comes a week before President Donald Trump promises to follow through with a plan to ban the Chinese-owned app in the US. ByteDance will need approval for the deal from governments of the United States and China.
Oracle will be announced TikTok’s ‘trusted tech partner’ in America, the WSJ reports
Meanwhile US company Gilead Sciences, whose Remdesivir antiviral drug is treating Covid-19 patients, has announced a deal to buy cancer drug maker Immunomedics for $21billion (£16.3billion).
The move will strengthen Gilead’s cancer portfolio by gaining access to Immunomedics’ promising breast cancer treatment drug Trodelvy.
‘This acquisition represents significant progress in Gilead’s work to build a strong and diverse oncology portfolio, Gilead chief executive Daniel O’Day said in a statement.
‘Trodelvy is an approved, transformational medicine for a form of cancer that is particularly challenging to treat. We will now continue to explore its potential to treat many other types of cancer.’