Ministers push for return of Arm to London Stock Exchange as £60bn takeover by Nvidia looks set to collapse
Stepping out: Business Secretary Kwasi Kwarteng
Britain should roll out the red carpet for Arm should the company’s takeover by Nvidia collapse, Whitehall sources have told the Mail.
The deal looks increasingly likely to fall through after the US Federal Trade Commission (FTC) moved to block the merger on competition grounds.
It is also being investigated by the UK’s Competition and Markets Authority, while the European Commission has opened up its own probe.
The interventions mean the acquisition is now behind schedule and will not close by the target date of March 2022.
Should the deal fail a return to the London Stock Exchange is increasingly on the cards.
It is understood that ministers including Business Secretary Kwasi Kwarteng would welcome the listing of Arm in London.
A source in Whitehall said: ‘There is no way this is going ahead. The competition concerns surrounding a sale to Nvidia mean this is exceptionally difficult.
‘It is not like the Softbank deal [when the Japanese conglomerate bought Arm, then listed on the stock market, in 2016].
‘The London Stock Exchange should be preparing to roll out the red carpet for Arm.’
The LSE is trying to become a world class tech hub and securing the return of Arm would give the market much needed credibility.
It refused to be drawn on specifics, saying: ‘London is an attractive capital centre with more than 100 IPOs taking place this year. We have people talking to companies, educating them on their options and how they might do it.’
But those close to the situation said Softbank was unlikely to roll over as the value of the deal has nearly doubled since being announced last September.
Initially Arm was valued at £30billion, which included 44m Nvidia shares, at the time worth £16.2billion.
But that stock portion of the transaction is worth £43billion as a result of the rise in Nvidia shares.
That has taken the overall value of the takeover to £57billion. Arm supplies chip designs to semiconductor companies and smartphone makers, including Apple.
The company’s role in the chip industry has historically been as a neutral supplier, raising concerns Nvidia could cut off competitors from essential Arm technology.
Holly Vedova, director at the FTC, said the watchdog was ‘suing to block the largest semiconductor chip merger in history to prevent a chip conglomerate from stifling the innovation pipeline for next-generation technologies’.
She added: ‘Tomorrow’s technologies depend on preserving today’s competitive, cutting-edge chip markets. This proposed deal would distort Arm’s incentives in chip markets and allow the combined firm to unfairly undermine Nvidia’s rivals.’