Nvidia says talks on a $ 40 billion arms deal are taking longer than expected

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Nvidia said Wednesday that talks with regulators to clear the proposed $ 40 billion (approximately Rs.297.905 billion) acquisition of British semiconductor technology company Arm are taking longer than expected.

The reveal came when Nvidia, the world’s largest manufacturer of graphics chips for gamers and artificial intelligence chips for data centers, forecast third-quarter sales above Wall Street’s expectations on Wednesday as it benefited from a boom in demand.

However, investors have been focused on whether Nvidia’s move to acquire Arm will stand regulatory scrutiny and complete in March next year, as Nvidia has promised. Arm has long been a neutral technology supplier across the chip industry, and Nvidia competitors like Qualcomm have resisted ending up Arm in the hands of a competitor.

Colette Kress, Nvidia’s chief financial officer, said in a statement the company remains confident the deal will close.

“Although some Arm licensees have raised concerns or objected to the transaction and discussions with regulators are taking longer than originally anticipated, we are confident that the transaction recognizes the benefits of the acquisition for Arm, its licensees and the industry.” ,” She said.

Nvidia shares fell 2 percent but rose later when executives predicted higher selling prices for gaming chips in a conference call with analysts.

“Many investors already see a small chance that the deal will ultimately be approved. If it is blocked, I think it will be answered with a collective shrug,” said Logan Purk, an analyst at Edward Jones.

The company estimated revenue for the current quarter at $ 6.80 billion (approximately Rs. 50,591 billion), up or down 2 percent. According to Refinitiv’s IBES data, analysts had expected an average of $ 6.53 billion (about 48,582 rupees).

Nvidia also beat expectations for second-quarter revenue, increasing 68 percent to $ 6.51 billion. Data center and gaming revenues were $ 2.37 billion and $ 3.06 billion, respectively, beating analyst estimates of $ 2.3 billion. USD (approximately 17,111 billion rupees) and USD 2.94 billion (approximately 21,873 billion rupees). ), according to refinitive data.

The company said adjusted earnings for the second quarter were $ 1.04 (approximately rupees 77.36) per share, up from estimates of $ 1.01 (approximately rupees 75.12) per share, according to Refinitiv data.

After the results were published in after-hours trading, Nvidia shares initially fell 2 percent, but later rose 2.8 percent.

© Thomson Reuters 2021

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