The agreement, announced Sunday, will be financed through a mix of cash and stock, the companies said in a joint statement.
Nvidia said Sunday that it plans to keep Arm’s headquarters in Cambridge, as well as expand its campus with a new research facility.
“ARM’s business model is brilliant. We will maintain its open-licensing model and customer neutrality, serving customers in any industry, across the world, and further expand ARM’s [intellectual property] licensing portfolio,” Huang wrote.
The deal is likely to come under significant scrutiny in the United Kingdom, where some politicians are concerned about preserving jobs at ARM. Nvidia’s rivals — which purchase chip designs from ARM — are also likely to object.
Another asset sale for SoftBank
“The combination is likely to lift SoftBank’s share price in Tokyo,” wrote Jeffrey Halley, senior market analyst for Asia Pacific at Oanda, in a note to clients.
Under the agreement, Nvidia will pay about $12 billion in cash and $21.5 billion in stock. SoftBank will receive a stake of less than 10% in Nvidia, and the Japanese company will also be eligible for a payout of up to $5 billion if ARM meets “specific financial performance targets,” according to SoftBank. The company did not disclose the targets.
The deal is expected to close within 18 months. It will first have to pass regulatory approvals from the United Kingdom, the European Union, the United States and China.
— Charles Riley contributed to this report.