China To Review Nvidia’s Acquisition Of Arm

Nvidia submitted an application to Chinese regulators in recent weeks asking them to approve the company’s US$40 billion acquisition of Arm, according to a report from The Financial Times on Tuesday, June 8. Nvidia stated the regulatory process was confidential, but it remains confident that it will receive approval and “close in early 2022.”

When the deal was announced last September, Nvidia and Arm stated it would take approximately 18 months to go through. But Chinese regulators could take up to 18 months from now to reach a conclusion, according to the Chinese antitrust lawyers cited by the FT. Regulators in the UK, Europe, and the US are also probing the deal.

Arm has as a joint venture called “Arm China” with Chinese private equity firm Hopu Investments. Arm China is headquartered in Shanghai, meaning China’s Ministry of Commerce and China’s State Administration for Market Regulation will have the right to review the proposed Nvidia deal. China would review Nvidia’s acquisition of Arm in the second half of 2021.

Several people familiar with the thinking of China’s antitrust regulators said the country’s chipmakers, such as Huawei’s HiSilicon and Semiconductor Manufacturing International Corporation, as well as state-backed chip investment group E-Town Capital had opposed the deal. Their concerns stemmed from fears of handing greater control of the designs that underpinned a large portion of China’s chip industry to US-based Nvidia.