Summary
NVIDIA Corporation (NVDA) announced on February 8, 2022, the mutual termination of its Share Purchase Agreement with SoftBank Group Capital Limited and SVF Holdco (UK) Limited concerning the acquisition of Arm Limited. The termination was driven by significant regulatory challenges that prevented the deal's consummation. As a result of the termination, NVIDIA will not acquire Arm. The $1.25 billion prepayment made by NVIDIA will be retained by SoftBank. However, NVIDIA will maintain its existing 20-year Arm license. The company expects to record a charge of $1.36 billion in the first quarter of fiscal year 2023, which includes the initial prepayment, due to this termination.
Key Highlights
- 1Termination of the Arm acquisition agreement between NVIDIA and SoftBank was mutually agreed upon.
- 2The primary reason for termination cited is significant regulatory challenges.
- 3NVIDIA will not acquire Arm.
- 4NVIDIA's $1.25 billion prepayment will be retained by SoftBank.
- 5NVIDIA retains its existing 20-year Arm license.
- 6NVIDIA will record a $1.36 billion charge in Q1 FY2023 related to the termination, including the prepayment.
- 7The transaction was originally announced on September 14, 2020.