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Nvidia has filed a petition with Chinese competition regulators to review the takeover of the $ 40 billion UK chip designer Arm, according to people familiar with the matter, about eight months after announcing the agreement.
The request, which people said was made in recent weeks, sets in motion a scrutiny period that can take between a year and 18 months, according to Chinese antitrust lawyers.
That would exceed the 18 months of time set by Nvidia when it was unveiled the agreement last September.
China is a huge market for Arm, which licenses its energy-efficient chip designs through a local joint venture. Its sales in the country, which two people familiar with the company amounted to about $ 500 million in 2019, give Chinese regulators right to review the acquisition.
Jensen Huang, chief executive of Nvidia, said in an interview with the Financial Times last month that the US chip company had “started the process” of collaborating with Chinese regulators. He said he was confident the deal would be scrapped within the deadline set by Nvidia.
He referred to the purchase of the Israeli company by Nvidia Mellanox, which was announced in 2019, in which Chinese regulatory approval was the last step in a 13-month process. “China usually comes after the other regulators. . . That’s consistent with the last experience I had, ”he said.
Nvidia added that the “regulatory process is confidential and we cannot comment on its progress.”
Several people familiar with the thinking of China’s antitrust regulators said the country’s chip makers, such as Huawei’s HiSilicon and Semiconductor Manufacturing International Corporation, as well as the state-backed chip investment group, E-Town Capital , tenien opposeed the deal.
His worries arose fears to control better of the designs that underpinned much of China’s chip industry at Nvidia based in the United States.
But Huang said a merger between Arm and Nvidia “would only bring more innovation to the market” and that he remained confident the deal would be closed.
Arm is fighting one long-running battle to control his business in China, after he and his partners failed to oust the head of his joint venture, Allen Wu.
Wu continues to legally control the business and negotiations for his exit have not yet yielded results.
Wu interposed procedure against Arm China last summer in the southern city of Shenzhen, where the joint venture is registered and where it has the support of some members of the local government, according to several people familiar with the situation.
The lawsuit, filed by two arms of China’s shareholders under Wu’s control, alleged that the board’s decision to withdraw it was invalid. Wu has been allowed to represent both Arm China and the two shareholders in the case, making him a plaintiff and a defendant.
“He’s basically suing himself,” said a person close to the subject. “One of his law firms may argue that the decision to dismiss him was invalid and the other law firm may agree.”
The Shenzhen court has not yet held an official hearing for the case. People close to the China Arm Council hope that the judges will end up installing their representative as the accused, but so far they have not been successful.
Wu and Arm China did not respond to any requests for comment.
Additional Qianer Liu reports in Shenzhen
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