Intel will ask U.S. regulators to block Nvidia takeover of Arm

Intel Corp. announced Monday that it has asked for a ruling from U.S. regulators to block a proposed takeover of chipmaker Arm Holdings PLC by Nvidia Corp. Intel asked the U.S. Federal Trade Commission to block the deal on the grounds that it would reduce competition in the market for graphics processing units. The FTC has 60 days to respond to Intel’s request. Analysts had expected that the FTC would go along with Intel and defend the deal. “We’re optimistic that the FTC will decide this transaction does not pose a competitive threat,” Nvidia Chief Executive Jensen Huang said in a statement. Nvidia will request that Arm provide more information and data regarding the deal, he said. Nvidia shares fell 1.8% in late morning trading. Arm shares added 1.4%. Intel shares fell 1.4% and touched their lowest level in a decade after the F.T.C. suit was announced. Citi analysts said there is a “small probability” that the FTC will rule to block the takeover, but that it’s not clear how the agency could rule against the deal in that situation. Based on the FTC’s history of supporting companies that are merging with the F.T.C.’s potential future rival, Citi estimates that the probability that the agency will tell Arm to get out of bed “sounds higher than zero.” Arm’s shares also got a boost after ARM issued strong growth targets for 2019 after reports the chipmaker would be taken over by Nvidia. ARM’s shares rose 2.5% and touched their highest level in six years in early trading.

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