(Bloomberg) -- The U.K. government ordered a national security review of Nvidia Corp.’s bid for U.K. chipmaker Arm Ltd., a probe that may force the company to delay a planned closing date.
The Competition and Markets Authority has been instructed to carry out the review alongside a closer look at whether there are antitrust concerns, Nadine Dorries, Secretary of State for Culture and Digital said in a statement Tuesday.
The U.K. has been amping up scrutiny of deals that may affect defense and has weighed a potential veto of the Nvidia takeover. The minister’s decision is separate to the U.K.’s antitrust review of how the deal may affect rivals and customers. Companies can allay security and antitrust concerns by selling off units or making binding pledges.
“Arm has a unique place in the global technology supply chain and we must make sure the implications of this transaction are fully considered,” Dorries said.
Lengthy regulatory reviews look set to see the company miss its initial target to close the deal in March 2022, which can be further extended until September. The EU has a March 15 deadline to rule on its review.
Rivals and chip customers have criticized the deal, valued at $40 billion when it was announced more than a year ago. Qualcomm Inc.and Alphabet Inc.’s Google have voiced complaints that Nvidia’s control of Arm’s licenses for essential chip technology could threaten the Cambridge, England-based chip designer’s role as a neutral partner often compared to the Switzerland of the semiconductor industry.
Other customers, including Broadcom Inc., MediaTek Inc. and Marvell Technology Group Ltd., have been supportive of the transaction.
“Following the Secretary of State’s decision, we will now begin our in-depth investigation into the NVIDIA and Arm deal on competition and national security grounds,” a spokesperson for the CMA said.
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