Mergers and acquisitions

Does Nvidia’s Arm Deal Spell The End of Acquisitions?

After a long and drawn-out battle, Nvidia is on the verge of dropping its landmark, $40 billion acquisition of Arm — but at what cost?

Reports emerged last night that Nvidia, the world’s foremost graphics processing unit (GPU) producer, would be pulling out of its pursuit of Arm. 

The deal in question, worth $40 billion, has been dragged out by regulators for months now and could spell a mood shift for the realm of mergers and acquisitions (M&A). 

What does this mean for Nvidia?

No business ever went under for not buying an acquisition target, and Nvidia is no exception. With a market cap of almost $600 billion, should this Arm deal officially go under, Nvidia will simply continue to be amongst the largest companies on the planet. 

But the time of big tech companies buying up who they want could swiftly come to an end, or at the very least, change forever. You may think that this is a tad dramatic, especially when you consider that Microsoft just acquired Activision Blizzard last week for $70 billion — important to note here is that this deal is still pending regulatory approval. 

Aside from that though, we’re seeing more and more scrutiny across the world of Big Tech acquisitions. Meta — formerly Facebook — is currently locked in a drawn-out battle with U.S. regulators who wish to see it broken up. Just last month, Microsoft’s proposed $20 billion acquisition of Nuance Communications was held up by British regulators after being signed off by the EU. Last year, Visa shut down a $5.3 billion deal to acquire Plaid after the U.S. Justice Department gave it a closer look than made the credit card giant comfortable. 

The list is endless and growing. While I’m not calling Nvidia-Arm a watershed moment in the way that M&A business is done, it should not be disregarded lightly, and there could be more pain to come.

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