(Reuters) – The Federal Trade Commission sued on Thursday for blocking the US chip company Nvidia Corp.'s planned acquisition of the British chip technology supplier Arm for more than $ 80 billion, which contributes to already significant global regulatory challenges to the business. [19659002TheFTCsaidthattheproposeddealwouldgiveoneofthelargestchipcompaniescontrolovercomputertechnologyanddesignthatcompetitorsrelyontodeveloptheirowncompetingchips
. The British regulators said last month that they would launch an in-depth investigation into the deal, and it is also under investigation in the European Union.
Arm licenses its chip architecture and drawings to the major chip manufacturers Apple Inc., Qualcomm Inc. and Samsung Electronics Co. Ltd., which supports the global smartphone ecosystem. Arm was sold to Japan's SoftBank in 201
Nvidia said it would "work to show that this transaction will benefit the industry and promote competition."
Arm declined to comment.
The share-heavy deal has more than doubled in value since it was announced in September 2020, as Nvidia shares have risen in line with the results of its data center operations. Nvidia will only be liable to a $ 1.25 billion resolution fee if the deal is not completed, and its shares closed up 2.2% to $ 321.26 on Thursday.
Prior to Nvidia's offer, Softbank had planned to apply for a listed offer for Arm. While Arm's revenue is growing sharply, rising 56.3% to $ 1.46 billion in the six months ended September 30, it is unclear whether Arm, at a stock exchange listing, would receive anything close to $ 80 billion in value offered by Nvidia
would be a new blow to the Japanese conglomerate whose Vision Fund assets fell by $ 10 billion last month, driven by declining investment values in Chinese e-commerce company Alibaba and the Didi Global Inc. ride
FTC, consisting of two Republicans and two Democrats, voted 4-0 to accept the challenge of the planned merger.
The FTC stated that "the proposed merger would give Nvidia the ability and incentive to use its control over this technology to undermine its competitors, which reduces competition and ultimately results in reduced product quality, reduced innovation, higher prices and less choice, which harms the miles
The FTC added the combined company "where I have the means and incentives to stifle innovative next-generation technologies, including those used to operate data centers and driver assistance systems in automobiles."