Biggest computer chip deal in history between SoftBank and Nvidia has fallen apart

SoftBank’s record-breaking sale of a prized chip designer to Nvidia has officially been called off.

At an initial value of US$40 billion, the U.S. chipmaker’s acquisition of British design firm ARM would have been the largest semiconductor deal on record.

But regulators around the world have long raised concerns about the deal, eventually leading to its collapse on Tuesday.

In a statement, SoftBank cited “significant regulatory challenges” that prevented it from completing the deal. It said that it would instead prepare ARM for a public offering within the fiscal year ending March 2023.

Under the terms of the agreement, SoftBank had already received a deposit of $1.25 billion during the signing. That payment was non-refundable, and “will be recognized as profit” in the Japanese conglomerate’s earnings for the quarter ending this March, it said.

The transaction was first announced in 2020, four years after SoftBank bought ARM for $32 billion, marking the largest foreign takeover by a Japanese firm at the time.

It was originally expected to close within 18 months, which would have been around this time. But it ran out of steam as it became a subject of global regulatory scrutiny, including from China and the United Kingdom.

In December, the U.S. Federal Trade Commission sued to block the deal, saying it would stifle competition and give the combined company too much control over chip technology and designs. The European Commission also launched an investigation into the deal late last year.

The deal would have had to pass regulatory approvals from the United Kingdom, the European Union, the United States and China.

Had it gone through, it would have been the semiconductor industry’s biggest-ever deal, topping Avago’s acquisition of Broadcom in 2015, according to Dealogic.

Rishi Iyengar contributed to this report.