The odds of Nvidia acquiring Arm by March 2022 are falling, according to Reuters, which reported that UK regulators might not even consider the case until the fall.
Reuters said Nvidia "has not yet filed an application to clear the deal with the European Commission" because "officials there have made it clear to the company that they need until September to gather enough information to accept Nvidia's formal application for approval, according to three people familiar with the matter."
Nvidia has faced similar regulatory delays in other markets. The company didn't formally seek approval from Chinese regulators until a few weeks ago, according to the Financial Times, which said those regulators are unlikely to reach a decision before the March 2022 deadline set when the Arm acquisition was announced.
The terms of the deal allow an extension to September 2022; if it doesn't close by then Nvidia and SoftBank both have the option to cancel the acquisition. The lack of filings doesn't necessarily mean that Nvidia will miss either deadline, however. As the company explained in a statement to Reuters:
“[M]any jurisdictions have a pre-notification period, where the parties have a detailed and ongoing dialogue with regulators. Our discussions with regulators have been thorough and constructive. We’ll continue to work throughout the summer, as we anticipated all along, and expect to close in early 2022.”
That's the optimistic view. Some analysts expressed their disagreement by giving the deal a 10% chance of being approved in April, though, and the 1.3% drop in the company's share price that followed the Reuters report suggests investors are also skeptical. (And therefore worried Nvidia will have to pay a $1.25 billion breakup fee.)
It doesn't seem like we'll know which prediction is correct any time soon. UK regulators probably won't even start to formally consider it until later this year, Chinese regulators could take up to 18 months to reach a decision, and many companies have pushed U.S. regulators to prevent the deal from closing.
