Nvidia facing Chinese delay to £28bn Arm takeover

The £28bn takeover of Arm by US giant Nvidia risks being delayed as China joins those countries scrutinising the deal.

Nvidia has submitted an application for approval to Chinese competition regulators, a process expected to take 18 months. 

When the deal was announced last September, Nvidia and Arm said it would be complete by spring 2022, a timeline that now looks unrealistic.

China joins regulators in the UK, Europe and the US in looking at the deal. The takeover has been politically charged as Arm is the UK’s premier tech firm.

The need to get the deal past Chinese regulators is the biggest hurdle yet, with complex questions about competition and the US-China trade war coming into play.

China is a key market for Arm’s energy-efficient microchips, which it licenses there through a local joint venture.

Its huge sales in the country, estimated to be more than £300million, put it in the crosshairs of the competition watchdog.

The company’s clout has put it on a collision course with state-backed chip investment group E-Town Capital and home-grown companies, including Semiconductor Manufacturing International Corporation, who all oppose the deal.

China is concerned that Nvidia’s takeover could hand control of chip designs to a US company, which could lead to the likes of Huawei losing access to its products. Experts said global politics could scupper a deal. 

In the US, competition regulators have been examining the deal for several months.

Last month the UK government ordered an investigation into the takeover, citing competition and national security concerns. 

There are also fears that some of the 3,000 UK jobs could be moved abroad, leaching vital skills that were protected under current owner Softbank.

If the deal is blocked, Softbank could be in a precarious position, as private buyers are unlikely to take on the same regulatory battle.