Arm and Nvidia argue proposed takeover will not hurt competition

The UK has launched an in depth investigation into the deal

Nvidia and Arm claim a proposed $40bn takeover deal represents a "once in a generation opportunity" that would benefit both Arm and the UK amid ongoing investigations into whether the deal would hurt competition.

The proposed takeover of UK chip designer and SoftBank owned Arm by US multinational technology firm Nvidia was first agreed back in September 2020 but has since been subject to scrutiny in the US, the UK, Europe and China over whether it would negatively impact competition.

In November, the UK's digital secretary Nadine Dorries launched an in depth investigation based on competition and security grounds after the Competition and Markets Authority (CMA) conducted a phase-one inquiry which found that the takeover raises "significant competition concerns".

Vendors such as Google and Microsoft have also expressed concerns that a takeover could lead to access to Arm's chips, which are widely used, being limited or to costs rising.

But in a 28-page response from Nvidia and Arm published by the CMA, they claim the deal presents a "unique, once in a generation opportunity to expand and enhance Arm's ecosystem, benefitting the UK and all Arm licensees".

They say SoftBank had considered an IPO for Arm but argue that capital markets "would expect Arm to make significant strategic changes, including cutting costs to maximise Arm's value" and say that it faces "significant challenges" to growth as a standalone business.

They claim Arm's competition has been "exploiting the delay" of the deal and are "moving fast".

And the companies believe the merged entity "would have no ability or incentive to foreclose competition" and stress that Arm will continue to work with the likes of Intel and AMD.

"The UK's extended review will not benefit Arm or promote competition," the response states.

"The transaction is not nearly as complicated as the decision would suggest. In every relevant market, Arm faces powerful competition that it cannot foreclose, and with that, the CMA's review should have concluded that the transaction does not give rise to a concern in any market."