After months of informal talks between the US chip company and regulators, Brussels will launch a formal competition probe into Nvidia's $54 billion acquisition of British chip design firm Arm.
According to two people who have direct knowledge of the matter, the investigation will likely begin once Nvidia notifies the European Commission about its plans to acquire Arm. The US chipmaker is expected to submit its submission within the week beginning September 6. However, they said that the date could change.
After the UK's Competition and Markets Authority stated that its initial assessment of the deal indicated serious competition concerns and that Nvidia's proposed remedies would not suffice to address these, the investigation in Brussels would be initiated.
According to the UK watchdog, it was concerned that the deal could stunt innovation in a variety of markets. Nvidia has the power to harm its competitors by restricting their access to Arms technology.
Nvidia announced in September 2013 that it would buy UK's chip designer from SoftBank (a Japanese investment conglomerate).
Rival chip companies raised objections to this deal. They pointed out that Arms chip designs were well licensed in the chip industry, and that Nvidia would be able to stop rivals using Arm technology. This is something that the US company has denied.
CMA recommended that the deal be investigated thoroughly, but the UK could also block it on national security grounds.
According to the European Commission, the EU has not been notified about the agreement.
Nvidia stated that the transaction would be beneficial to Arm and its licensees as well as competition and the entire industry. We are currently working through the regulatory process. We look forward to engaging the European Commission to discuss the transaction and to address any concerns.