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Nvidia’s £30bn takeover of Arm on the brink of collapse: So will British chip designer now return to London stock market?










Nvidia is set to ditch its £30billion swoop on British chip designer Arm after a fierce backlash from regulators worldwide.

US semiconductor giant Nvidia is understood to have conceded that the deal is unlikely to complete.

Arm owner Softbank is now stepping up preparations to list the Cambridge company on the public markets, according to Bloomberg.

Thwarted: US semiconductor giant Nvidia is understood to have conceded that its £30bn swoop on British chip designer Arm is unlikely to complete

Thwarted: US semiconductor giant Nvidia is understood to have conceded that its £30bn swoop on British chip designer Arm is unlikely to complete

That could pave the way for the pioneering firm to return to the London Stock Exchange, where its shares were listed before its £24billion takeover by Softbank in 2016.

But the UK faces a fight to persuade Softbank to chose the City over New York. Analysts said Britain was ‘Arm’s natural home’ and Rishi Sunak recently vowed to make the City ‘an incredibly attractive place’ for companies to list ‘whether it is Arm or anyone else’.

Arm chief executive Simon Segars could be in line to get a payday ‘well in excess’ of £74million if the Nvidia deal goes through, an expert told the Mail. He would still receive a bumper, though smaller, payout if the group floated.

Nvidia agreed to buy Arm in September 2020. It would be the biggest-ever semiconductor industry takeover if it is successful but Nvidia faces losing a £950million downpayment for Arm if the deal falls through.

The swoop has triggered uproar from Arm’s customers and is under scrutiny in China, the US and the EU, adding months of delays to a process that was due to complete in March 2022.

In November, UK Culture Secretary Nadine Dorries intervened on competition and national security grounds, piling more delays on the deal. 

She believes it is crucial for the UK’s national security to maintain reliable access to Arm technology and that there are fears the Nvidia takeover could remove this.

Arm’s customers include Google, Samsung, Apple and Apple. Softbank licenses Arm’s designs to more than 500 companies who use them to make their own chips, which are used in 95 per cent of the world’s smartphones and other devices – from cars to fridges – that are connected to the internet.

In the UK the takeover is being investigated under the Enterprise Act of 2002. That was replaced this month by the National Security and Investment Act, giving the Government greater power to intervene in the sale of sensitive firms.

Even if the deal was waved through under the Enterprise Act, the new law could be invoked retrospectively to scrutinise the tie-up again. 

Nvidia’s approach came at a critical time as a global shortage of microchips is sending shock waves throughout the manufacturing sector and slowing down production lines.

Arm co-founder Hermann Hauser, who spun off the company from Acorn Computers in 1990, recently said he believed Arm would be better off as an independent company listed in London than part of Nvidia.

Russ Shaw, founder of Tech London Advocates, said: ‘If they go down the listing route, the UK is Arm’s natural home. 

‘It was born here, developed here, for the nation. This is our largest tech business in an area that so many countries at looking at on a strategic level.’

He added: ‘Scrutinising the deal will put off some future overseas investors in UK tech but it also says, “Hey, we’re really serious about our industry”. Arm’s expertise demonstrates that the UK no longer competes with Paris and Berlin. It is right up there with Silicon Valley and Shanghai.’

Nvidia and Arm are still pleading their case to regulators.

Nvidia said: ‘This transaction provides an opportunity to accelerate Arm and boost competition and innovation.’ Softbank said: ‘We remain hopeful the transaction will be approved.’

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Australia’s richest man buys Williams Formula One team’s battery and tech arm in £164m deal










The mining company owned by Australia’s richest man has snapped up the battery and technology arm of the Williams Formula One racing group for £164million.

Fortescue Metals will buy the unit, which is based in the Oxfordshire town of Wantage, to help it reach its green targets.

One of the first projects to be developed will be a battery-powered freight train.

Green targets: Andrew Forrest (pictured), founder and chairman of Fortescue Metals, has snapped up the battery and technology arm of the Williams Formula One for £164m

Green targets: Andrew Forrest (pictured), founder and chairman of Fortescue Metals, has snapped up the battery and technology arm of the Williams Formula One for £164m

It will also use the technology to adapt other heavy industrial equipment and haulage trucks. 

Fortescue – which is buying the Williams division from EMK Capital and Williams Grand Prix Engineering – is aiming to be carbon neutral by 2030.

Andrew Forrest, founder and chairman of Fortescue with a £13billion fortune, said the company had ‘scoured the world for battery technology’.

He added: ‘It’s great to win a Formula One race but we’re all in a race against climate change.’

Forrest said it will integrate Williams Advanced Engineering into its clean energy unit, but keep its base in Oxfordshire.

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Arm co-founder believes it would be better off as independent company listed on London stock market instead of being taken over by a US rival










Arm’s co-founder believes it would be better off as an independent company listed on the London stock market instead of being taken over by a US rival in a £31billion deal, 

Hermann Hauser, who spun off the Cambridge-based chip designer from Acorn Computers in 1990, told the Mail that Arm could list as a standalone company with some of its largest customers taking stakes. 

His intervention came amid mounting opposition to the takeover by Nvidia. 

Belief: Arm had been a member of the FTSE 100 for 18 years before being bought by Softbank

Belief: Arm had been a member of the FTSE 100 for 18 years before being bought by Softbank

Arm is owned by Softbank of Japan, which bought the business in 2016 for £24billion. The proposed sale to Nvidia is being scrutinised by regulators around the world. 

Arm and Nvidia bosses were this month forced to defend the blockbuster chip deal. They argued a share float was not a viable option. In a document submitted to the Competition and Markets Authority, they accused opponents of ‘romanticising Arm’s past’. They added that Arm was not in a fit state to be refloated on the stock market via an initial public offering (IPO). 

Arm chief executive Simon Segars said: ‘We contemplated an IPO but determined that the pressure to deliver short-term revenue growth and profitability would suffocate our ability to invest, expand, move fast and innovate.’ 

Hauser, 73, dismissed the comments. He said no one is romanticising Arm’s past, pointing out that the company had been a member of the FTSE 100 for 18 years before being bought by Softbank. 

The entrepreneur and tech venture capitalist said: ‘The idea that Arm is underperforming is just not true. Look at its inroads into the data centre market in recent years.’ 

Austrian-born Hauser believes there is now a 50 per cent chance that the deal with Nvidia will collapse after the Government ordered a full blown investigation on competition and national security grounds. 

The Government is set to make a decision in May, while regulators in China, the US and EU are also scrutinising the deal. 

Hauser, one of the best known figures in the Cambridge technology community, said Softbank ‘must be looking at other options’ – and one option is for Arm to come back to London. Customer Qualcomm said in June last year it would be willing to buy a stake in Arm alongside other industry investors if Softbank listed the company on the stock market instead of selling it to Nvidia. Qualcomm chief executive Cristiano Amon said at the time: ‘If Arm has an independent future, I think you will find there is a lot of interest from a lot of the companies within the ecosystem to invest in Arm.’ 

Brokers believe customers including Apple and Taiwan Semiconductor Manufacturing Company – better known as TSMC – would also join Qualcomm.

One broker said: ‘Finding customers to take a stake in Arm would not be difficult. Softbank could sell the majority and keep a minority stake itself. This solution protects Arm’s neutrality and gives Softbank an exit.’ 

Nvidia agreed to buy Cambridge-based Arm from Softbank in September 2020 and wanted to close the deal by March this year. That deadline will not be met.

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Unilever insists it won’t pay a penny more than £50bn for GSK’s consumer healthcare arm










Unilever effectively abandoned its pursuit of Glaxosmithkline’s consumer healthcare arm last night by insisting it would not pay a penny more than £50billion.

The consumer goods giant, whose brands include Marmite, Hellmann’s, and Ben & Jerry’s, has had three bids turned down in recent weeks.

GSK chief executive Emma Walmsley, who is planning to spin off consumer health into a separate company listed on the stock market, said even the latest bid of £50billion from Unilever ‘fundamentally’ undervalued the business.

Final offer: Unilever, whose brands include Marmite, Dove, Hellmann's and Ben & Jerry's, has seen three bids turned down by GSK in recent weeks

Final offer: Unilever, whose brands include Marmite, Dove, Hellmann’s and Ben & Jerry’s, has seen three bids turned down by GSK in recent weeks

Her company’s brands include Sensodyne, Aquafresh, Panadol and Advil.

But Unilever boss Alan Jope on Monday, insisted GSK was a ‘strong strategic fit’ and he would continue to push for a deal. Shares in Unilever tumbled, however, amid fears it would overpay.

Jope’s plans met fierce criticism in the City as investors and analysts suggested he should fix problems within Unilever rather than embark on an expensive acquisition.

Yesterday, Unilever appeared to throw in the towel, saying: ‘We will not increase our offer above £50billion.’

Sources said it was only interested ‘if the other side wants to engage at that level’.

Bruno Monteyne, analyst at City broker Bernstein, said Unilever was ‘trying to control the narrative’.

He said: ‘Rather than having the deal refused by investors it is better not to let it get to that stage. This gives them an exit, meaning it looks like it is their decision not to go any further.

‘But that is damage limitation the market will see through. Many questions will be asked in terms of how they came up with this and the valuation, what else is wrong with the business?’

But he suggested that GSK bosses may also be ‘kicking themselves’, having overplayed their hand trying to flush out a higher offer.

Unilever lost 10 per cent of its value on Monday and Tuesday – reducing its market cap from £100billion to £90billion – as investors reacted with horror to the planned deal.

But the shares bounced back 4.5 per cent, or 159p, to 3675.5p yesterday.

On Monday, Jope said Unilever was shifting its focus to high-growth health, beauty and hygiene businesses. 

He said that it would sell low-growth food businesses, which could include Marmite, to provide the funds for takeovers of beauty, health and hygiene brands.

He said that the FTSE 100 giant could even offload its entire food and refreshments business.

Analysts welcomed the shift in focus to faster-growing areas after years of stagnant sales at the group. But they questioned the value of such a huge takeover.

GSK is planning to press ahead with its plans to demerge the consumer healthcare business, which is 32 per cent-owned by Pfizer.

Its shares rose sharply on Monday on hopes that interest from Unilever could trigger a bidding war.

But they fell back 2.1 per cent yesterday.

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GlaxoSmithKline’s consumer arm could be thrust into a full-blown bidding war after rejecting three offers from Unilever at the end of last year

  • It is understood Unilever is preparing a fourth offer for the business 
  • Leading analyst says rival bids could emerge  
  • Bidding war could attract private equity firms
  • GSK boss Emma Walmsley is planning to list the consumer healthcare arm 










Sell off: GSK's Emma Walmsley (pictured) is planning to list the consumer healthcare arm

Sell off: GSK’s Emma Walmsley (pictured) is planning to list the consumer healthcare arm

GlaxoSmithKline’s consumer arm could be thrust into a full-blown bidding war after it rejected three offers from Unilever at the end of last year. 

It is understood Unilever is preparing a fourth offer for the business, which owns brands including Aquafresh toothpaste, and is being spun out from GSK this year. 

But a leading analyst said rival bids could emerge and other consumer healthcare firms would ‘do the numbers’. Bernstein’s Bruno Monteyne said Unilever should fix its own business and that the purchase is ‘a pretty bad idea’. 

He said a bidding war could attract private equity firms, but they may be turned off by the premium price after GSK rejected Unilever’s £50billion proposal. Analysts value the business at around £45billion. 

GSK chief executive Emma Walmsley is planning to list the consumer healthcare arm, which has annual sales of £9.6billion, in London, with GSK maintaining a stake. But she has come under pressure from activist investor Elliott Management to open a process to sell the unit. 

Private equity firms including Advent International, CVC Capital Partners and KKR have also eyed up the business. ‘Unilever is still in the running. You would expect other consumer health companies to do the numbers,’ said Monteyne. 

And he warned that Unilever, which makes Ben & Jerry’s ice cream and Dove soap, would continue struggling with slow growth even if it buys GSK’s consumer arm. 

He said: ‘More than 80 per cent of Unilever would still be their old business. 

‘Buying a new business isn’t going to make it more likely you fix the other 80 per cent plus of your business.’ He added that GSK is growing slowly and it will be hard for Unilever to boost sales. 

‘They should stay focused on fixing their core business.’

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Nvidia claims critics are ‘romanticising Arm’s past’ as it fires back in row over takeover of UK chip designer










Nvidia and Arm have defended their blockbuster chip deal just months before the Government decides whether or not to block the takeover.

The proposed acquisition of British chip designer Arm by its American rival is under investigation by regulators around the world amid fears it could hit competition.

But in a document submitted to the Competition and Markets Authority, the firms argue that the £31billion deal is the best option on the table, adding that it is the only way for Arm to find the investment it needs.

Competition fears: The proposed acquisition of British chip designer Arm by its American rival Nvidia is under investigation by regulators around the world

Competition fears: The proposed acquisition of British chip designer Arm by its American rival Nvidia is under investigation by regulators around the world

The deal has faced a wave of criticism with many in the industry calling for Arm to be listed on the London Stock Exchange instead of sold off to a US tech rival.

But in the document both rule out the option, stating that Arm is not in a fit state to be floated and accusing opponents of ‘romanticising Arm’s past’.

The document said: ‘In the media deal opponents urge the CMA to block the deal so that Arm can pursue an initial public offering. They equate Arm’s popularity with a high market valuation and success, but the public markets are unsentimental.

‘Arm has endured flat revenues, rising costs, and lower profits that would present challenges for a 30-year-old public company.

‘The capital markets would expect Arm to make significant strategic changes, including cutting costs to maximize Arm’s value.’

Arm chief executive Simon Segars added: ‘We contemplated an IPO [initial public offering] but determined that the pressure to deliver short-term revenue growth and profitability would suffocate our ability to invest, expand, move fast and innovate.’

The defence has been published two months after ministers ordered a full-blown investigation into Nvidia’s takeover of Arm on competition and national security grounds. But yesterday’s document failed to mention security even once.

When the investigation was launched in November it was off the back of findings from the National Cyber Security Centre, the Government organisation which provides cyber security guidance, who had identified ‘a number of potential risks to national security’.

However, the two companies did address competition concerns, in particular the idea that Nvidia would cut off competitors from essential Arm technology – ending Arm’s history as a neutral supplier.

The document said: ‘The theory does not hold up to scrutiny.

‘Trying to foreclose Arm licensees would immediately reduce Arm’s licensing revenue, immediately damaging Nvidia’s investment. No economically rational, publicly traded entity would embrace such a self-defeating strategy.’

Nvidia – which is based in California –agreed to buy Cambridge-based Arm from Japanese giant Softbank in September 2020 and had wanted to close the deal by March this year.

That deadline will not be met as the Government is set to make a decision in May, while regulators in China, the US and EU are also scrutinising the deal.

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Pharma giant Glaxosmith-kline got a shot in the arm after the US government ordered more of its Covid treatment.

The shares jumped 1.3 per cent, or 20.2p, to 1631.6p after it announced that it will deliver another 600,000 doses of sotrovimab to the US in the first quarter of 2022.

The antibody treatment is designed to prevent and reduce the severity of Covid-19 symptoms in patients, particularly those from high-risk groups.

US deal: Glaxosmithkline's sotrovimab antibody treatment is designed to prevent and reduce the severity of Covid-19 symptoms in patients, particularly those from high-risk groups

US deal: Glaxosmithkline’s sotrovimab antibody treatment is designed to prevent and reduce the severity of Covid-19 symptoms in patients, particularly those from high-risk groups

The treatment, which mimics the body’s immune system, was developed with US biotech firm Vir, and has now attracted global orders totalling 1.7m doses.

The US government also has an option to order more in the second quarter of this year, while another 2m doses are expected to be made in the first half of 2022.

It follows a £734million order from the US in November for an undisclosed number of doses.

Stock Watch –  Senior

Engineering group Senior rose after agreeing deals with Boeing and Honda.

It will supply Boeing with machinery to build aircraft and flight control systems for the manufacturer’s 737, 767 and 777 planes.

And it will provide Honda with exhaust connectors for the Japanese car maker’s petrol engines. 

The connectors are being made at factories in India and China, and deliveries have started. 

The double dose of deal news lifted its stock 3.5 per cent, or 4.8p, to 141.9p.

Animal medicine firm Dechra was among the FTSE 100’s top risers after clinching a deal for a canine cancer drug. The shares bounded 3.4 per cent, or 146p, higher to 4446p after it secured the worldwide rights to a treatment for canine lymphoma.

The tablet slows the progression of the illness and went on sale in the US last year.

Under the agreement with California firm Anivive, Dechra will acquire the right to market verdinexor around the world as well as take over supply contracts to manufacture the drug.

The FTSE 100 was up 0.6 per cent, or 46.12 points, at 7491.37 while the FTSE 250 dipped 0.1 per cent, or 26.37 points, to 23,028.18.

Markets attempted to rally following Monday’s volatile session, when the Nasdaq on Wall Street dropped into correction territory before a strong comeback to close in the green.

The recovery in US tech stocks boosted Scottish Mortgage Investment Trust, which counts Tesla and computer chip maker Nvidia among the biggest names in its portfolio. The shares jumped 5 per cent, or 57p, to 1196p.

Other funds with large tech holdings also benefited, with Allianz Technology Trust adding 3.1 per cent, or 9.5p, to 314.5p while Baillie Gifford US Growth Trust climbed 3.7 per cent, or 9.5p, to 266p.

Oil firms were on the rise as Brent crude prices climbed above $83 a barrel. Shell rose 1.7 per cent, or 28.8p, to 1759.6p while BP gained 1.8 per cent, or 6.55p, to 369.6p.

Gaming giant Flutter, owner of Paddy Power and Betfair, flew 2.6 per cent, or 285p, higher to 11,425p after completing its £402million purchase of bingo website Tombola, first announced in November.

Electronics maker Electrocomponents surged 1.3 per cent, or 15p, higher to 1190p as it predicted its full-year profits will be slightly ahead of estimates after a better than expected third quarter.

Revenues in the three months to the end of December rose 21 per cent year-on-year, although it warned that in the final quarter it faced ‘external pressures’ from Covid-19 and supply chain disruption.

Mid-cap software firm Kainos inched up 1.1 per cent, or 18p, to 1646p after snapping up US group Blackline for an undisclosed sum.

Blackline designs software to help companies track spending and procurement. The firm will be integrated into Kainos’s Workday business software.

Meanwhile, property giant Great Portland Estates dropped 1.9 per cent, or 14p, to 737p after analysts at Berenberg downgraded their rating on the stock to ‘hold’ from ‘buy’ as they reassessed the state of London’s office market.

Consumer goods giant Unilever also fell, sinking 0.6 per cent, or 24.5p, to 3942p after a downgrade to ‘neutral’ from ‘buy’ from Bank of America, which cut its target price to 4500p from 5000p.

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