(Bloomberg) -- The U.K. government is considering attaching conditions on the number of jobs Nvidia Corp. will keep in the U.K. as part of its proposed takeover of Arm Ltd., the country’s most valuable tech company, according to people familiar with the matter.
Officials are unlikely to block the $40 billion sale, the people said, asking not to be identified because the talks are private. But the conditions are expected to focus on maintaining the about 3,000 U.K. staff, and keeping the company’s headquarters in Cambridge.
Current owner, Tokyo-based SoftBank Group Corp., made similar voluntary but legally-binding commitments after it bought the semiconductor giant in 2016 for $32 billion, pledging to at least double employees in the U.K. over five years.
The U.K. has the ability to intervene in deals over factors such as national security. It could take as long as two months before the government decides to place any restrictions, the people added.
The proposed takeover comes as U.K. Prime Minister Boris Johnson seeks to revive the U.K.’s coronavirus ravaged economy and the country prepares to finalize its split from the European Union. The pandemic has already cost 700,000 jobs and more are expected to go as government job support is unwound next month.
“We are investigating this deal further and ministers have spoken to the relevant companies,” Prime Minister Boris Johnson’s spokesman James Slack said yesterday. He signaled the government’s interest in Arm’s Cambridge headquarters and said the company “makes an important contribution to the U.K. economy. We want that to continue to be the case.”
A spokesman for the Department for Digital, Culture, Media and Sport said “when a takeover may have a significant impact on the U.K., we will not hesitate to investigate further and take appropriate action.”
Representatives for Nvidia, Arm and SoftBank did not immediately respond to requests for comment.
Johnson - led by his chief adviser Dominic Cummings - has put technology at the heart of his plans for the economy. Talks over a trade deal with the European Union have foundered over Johnson’s plans to plow billions of pounds of public money into supporting the sector, underlining his vision for the future.
Nvidia said it will keep Arm’s headquarters in the U.K. and will invest in a new facility there to push forward AI research, educate customers and provide a place for experimentation in robotics and automation.
Arm’s neutral position as a supplier at the heart of the chipmaking industry means the deal has already raised concerns, because Nvidia directly competes with Arm’s customers like Qualcomm Inc., Intel Corp. and Advanced Micro Devices Inc.. But Nvidia Chief Executive Officer Jensen Huang has argued he has no incentive to give himself sweetheart licensing arrangements, because that would risk jeopardizing Arm’s relationships and therefore sales to others.
The deal is also subject to regulatory approvals in China, the European Union and the U.S. The U.K. opposition party’s business spokesman Ed Miliband has called for legally binding and effectively permanent assurances to protect the company’s Cambridge headquarters and British jobs.
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