(Sharecast News) – The UK’s Competition and Markets Authority will investigate US chip designer Nvidia’s $40bn acquisition of Cambridge-based Arm Holdings from Softbank Group.
Nvidia announced in September last year that it had agreed to buy Arm. The CMA said on Wednesday that it was calling for interested third parties to comment on the impact the takeover could have on competition in the UK, as it prepares to launch a formal investigation later this year.
Arm develops and licenses intellectual property (IP) and software tools for chip designs. The CMA said the products and services supplied by the companies support a wide range of applications used by businesses and consumers across the UK, including desktop computers and mobile devices, game consoles and vehicle computer systems.
The watchdog will look at what effect the deal will have on UK competition and consider whether, following the takeover, Arm would have an incentive to withdraw, raise prices or reduce the quality of its IP licensing services to Nvidia’s rivals.
Andrea Coscelli, chief executive of the CMA, 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.”
