Skip to main content

Nvidia Stock Flat as U.K. Reportedly Might Block Arm Deal

An assessment of Nvidia's acquisition of Arm contains implications for U.K. national security, a media report says.

The U.K. is reportedly considering blocking Nvidia's  (NVDA) - Get Free Report acquisition of Arm Ltd. due to potential risks to national security.

Shares of the Santa Clara, Calif., chipmaker's stock at last check were up slightly to $198.29.

An assessment of the $40 billion acquisition contains worrying implications for national security and the U.K. is currently inclined to reject the takeover, Bloomberg reported, citing a person familiar with government discussions. 

Oliver Dowden, the U.K.'s secretary of state for digital, culture, media and sport, said in April that regulators were intervening in the semiconductor company's proposed acquisition of Arm from Softbank Group SFTBY.

Dowden asked the Competition and Markets Authority to prepare a report on whether the deal could be deemed anti-competitive, along with a summary of any national security concerns raised by third parties.

The report was delivered last month.

No final decision has been taken and the U.K. still might approve the deal with conditions, Bloomberg reported.

Dowden is set to decide on whether the merger needs further examination by the U.K.’s competition authorities.

“We continue to work through the regulatory process with the U.K. government,” an Nvidia spokesperson told Bloomberg. “We look forward to their questions and expect to resolve any issues they may have.”

The news comes on the same day as J.P. Morgan analyst Harlan Sur raised his price target to $215 from $176 on Nvidia, affirming his overweight rating.

In June, Broadcom  (AVGO) - Get Free Report, Marvell  (MRVL) - Get Free Report and Taiwan's MediaTek became the first Arm customers to publicly support the $40 billion proposed takeover.

That same month Qualcomm  (QCOM) - Get Free Report reportedly expressed an interest in Arm if the sale to Nvidia was blocked.

A group made up of Qualcomm, Alphabet's  (GOOGL) - Get Free Report Google, and Microsoft  (MSFT) - Get Free Report among others, asked antitrust officials to intervene in the sale.

In May, Nvidia announced a 4-for-1 stock split. The split went into effect July 20.

Alphabet, Broadcom, Marvell, Microsoft and Nvidia are holdings in Jim Cramer's Action Alerts PLUS investing club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.