Nvidia Stock Dips on Report of EU Opposition to Arm Deal

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A sign is posted in front of the Nvidia headquarters.

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Shares of


the largest U.S. semiconductor maker by market value, were falling Tuesday after a report said the company faces fresh opposition from the European Union over its planned $40 billion acquisition of British chipmaker Arm. 

EU officials said concessions made by Nvidia (ticker: NVDA) don’t go far enough to mitigate potential damage to rivals, the Financial Times reported, citing unidentified EU officials. 

One official told the Financial Times that it’s “not certain the deal will get easily cleared here.” But people with direct knowledge of the Brussels investigation told the FT it was too early to say whether the deal would be blocked, and that an agreement could still be reached.

Nvidia is preparing to file for regulatory clearance for the deal in Brussels this week, possibly as soon as Tuesday, according to the FT. 

Nvidia told Barron’s in late August that it was “working through the regulatory process and we look forward to engaging with the European Commission to address any concerns they may have.” 

The United Kingdom last month said that Nvidia’s acquisition of Arm raised “serious competition concerns.” The U.K.’s competition watchdog recommended an in-depth investigation of the deal. 

Nvidia has acknowledged that its acquisition of Arm was taking longer than expected with the deal facing regulatory scrutiny in several countries. Nvidia said, however, that it was “confident in the deal and that regulators should recognize the benefits of the acquisition to Arm, its licensees, and the industry.” 

Beyond the EU and U.K., Nvidia must gain approval from regulators in China and the U.S. 

Tesla Chief Executive Elon Musk late last month also signaled concern over Nvidia ‘s bid for chip technology company Arm.

Owned by Japanese investor SoftBank, Arm licenses intellectual property to the likes of Apple (AAPL), Amazon (AMZN), and Samsung, which all use the chip designs in the mobile phones and computer processors.

Nvidia shares fell Tuesday by 1.25% to $225.57.

Write to editors@barrons.com

William Murphy

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