ARM’s US$40bn takeover faces UK competition probe as rivals call for block

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ARM Holdings’ takeover by US chip designer Nvidia is facing a competition probe after rivals expressed concern that it might affect access to the UK’s technology.

ARM’s low-power memory chips are crucial for mobile phones and tablets and its pioneering tech is licensed to 500 manufacturers across the globe.

US graphics chip specialist Nvidia Inc (NASDAQ:NVDA) agreed to buy Cambridge-based ARM for US$40bn from Softbank in September, but today the UK’s Competition and Markets Authority confirmed it was looking into the deal.

Andrea Coscelli, the CMA’s chief executive, said: “The chip technology industry is worth billions and critical to many of the products that we use most in our everyday lives.

“We will work closely with other competition authorities around the world to carefully consider the impact of the deal and ensure that it doesn’t ultimately result in consumers facing more expensive or lower-quality products.”

Coscelli added that specifically, the investigation will look at whether an “incentive to withdraw, raise prices or reduce the quality of its intellectual property licensing services to Nvidia’s rivals”.

In a letter to the Financial Times, Jensen Huang, Nvidia’s chief executive, said the US group would maintain Arm’s open licensing model.

“We have no intention to ‘throttle’ or ‘deny’ Arm’s supply to any customer,” he wrote.

Even, so rivals fear that the opportunity to utilise ARM’s dominant position will be irresistible and hard to stop once the deal is approved.

Herman Hauser, one of the UK company’s co-funders argued when the deal was announced that it might lead to Nvidia becoming the next US tech giant alongside Google and Facebook.

The UK government is also be pressurised to block the deal in the interests of national security.

The CMA has invited interested parties to submit their views before it opens a formal investigation later this year.

Brussels is also set to open its own separate EU probe into the deal.

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