- Nvidia (NASDAQ:NVDA) has confirmed it's buying Arm Holdings for $40B from SoftBank (OTCPK:SFTBY).
- The deal is expected to be immediately accretive to non-GAAP EPS and gross margin, Nvidia says.
- Reports yesterday noted that Arm and Nvidia have been talking for weeks and that a potential deal was imminent.
- SoftBank will stay committed to long-term Arm success through its ownership stake in Nvidia (expected to be under 10%).
- Nvidia says that Arm will continue to operate its open-licensing model while "maintaining the global customer neutrality that has been foundational to its success."
- In the deal - approved by the boards of Nvidia, SoftBank Group and Arm - Nvidia will pay SoftBank $21.5B in Nvidia common stock and $12B in cash ($2B payable at signing). Nvidia shares to be issued at closing are 44.3M.
- Also, SoftBank may receive up to $5B in cash or common stock via earn-outs, depending on Arm reaching certain performance targets.
- Nvidia is also issuing $1.5B in equity to Arm employees.
- And it will finance the cash portion with cash on hand.
- Nvidia plans a webcast at 8:30 a.m. ET to discuss the deal.