Softbank needs cash, will Anvidia take advantage of this? / Interpretation


Softbank needs to find the golden path between the possible sale of ARM to Anvidia, and regulatory concerns, with time also being an important factor

ARM logo. Press photo

The global economic press is full of estimates about the amount Anvidia will pay Softbank for ARM. The prevailing estimate is that the amount will be higher than $ 32 billion the amount in which it acquired ARM in 2016 but how high? For one dollar? In a billion dollars?
On the other hand there are estimates that this may be the biggest deal in the chip space, but the biggest deal to date was Abago’s acquisition of Broadcom in 2015 for $ 37 billion.

If we add a new figure to the equation, then valuations for the issuance of ARM would give the company a valuation of $ 44 billion. The question, however, is whether Softbank will be willing to wait, because it desperately needs $ 41 billion in cash. Assuming she would not receive such a sum on ARM, she also announced that she had recruited an investment banker to assist her in selling the Internet of Things business – Treasure Data.

Thus it is estimated that the amount will be somewhere in the middle of the data, closer to 32 billion if Anvidia is the only one interested or to a higher amount if there are more competitors.

The concern, however, is that the acquisition of ARM by Anvidia, which is a major customer of ARM. However, ARM sells licenses to almost every chip company – Apple (which uses them for its phones), Qualcomm, AMD and even Intel, which in most cases only use its products within the chips it manufactures. In such a case, these companies would be required to continue to enjoy equal access to technology, which was not relevant when Softbank, which is a neutral holding company, owns ARM.

Will Nvidia become a chip giant? Interested in purchasing ARM from Softbank
Softbank may issue or sell ARM


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