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20 April, 2021 - 21:20 By Tony Quested

Government orders official probe into $40bn NVIDIA bid for Arm

NVIDIA’s proposed $40 billion takeover of Cambridge superchip architect Arm is under official and potentially decisive scrutiny by the UK government. Digital Secretary Oliver Dowden has issued a Public Interest Intervention Notice (PIIN) in relation to the proposed deal.

He wrote to the Competition and Markets Authority (CMA) to inform them of his decision and has instructed them to begin a ‘phase one’ investigation to assess the transaction.

The CMA will now prepare a report with advice on jurisdictional and competition issues. The report will also include a summary of any representations it receives on potential national security issues arising from a consultation it will launch to gather third-party views. Alongside the CMA’s process, the Government will examine the national security public interests.

The Digital Secretary, who has ‘quasi-judicial’ powers under the Enterprise Act 2002 to intervene in certain mergers on public interest grounds, has issued the notice to ensure that any national security implications for the United Kingdom are explored.

Arm which is headquartered in Cambridge, is a major global player in the semiconductor industry. Semiconductors are fundamental to current and future technologies – from artificial intelligence and quantum computing to 5G. Semiconductors also underpin the UK’s critical national infrastructure and are found in defence and national security related technologies.

Dowden said: “Following careful consideration of the proposed takeover of Arm, I have issued an intervention notice on national security grounds.

“As a next step and to help me gather the relevant information, the UK’s independent competition authority will now prepare a report on the implications of the transaction, which will help inform any further decisions.

“We want to support our thriving UK tech industry and welcome foreign investment, but it is appropriate that we properly consider the national security implications of a transaction like this.”

The ‘phase one’ investigation will ensure specific considerations around competition, jurisdiction and national security are assessed. It will advise whether the acquisition results in a substantial lessening of competition in any market in the UK and whether it would be appropriate to deal with any concerns through undertakings by the parties involved in place of a referral to a ‘phase two’ investigation.

The CMA has until midnight at the end of July 30 to complete and submit the report.

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