Nvidia's share price dropped a few percent on the news of the intervention, which has been invoked to give the UK Competition and Markets Authority (CMA) time to report on multiple issues including jurisdictional, competition and national security issues.
The CMA had already announced an investigation of the deal back in January 2021, but that was only based on competition considerations alone. The government's invocation includes that but adds the aspect of national security considerations.
The next process starts with a repeated first look at the circumstances and implications of a merger and will include third-party views – which in the case of Nvidia-ARM have been consistently opposed to the deal. The CMA has until July 30, 2020, to return its phase one report at which point the politicians have a choice to either allow the transaction or invoke a more rigorous phase two investigation.
The UK's department of digital, culture, media and sport, which announced the intervention, made the observation that Cambridge-based ARM is a global player in the semiconductor industry and that semiconductors are fundamental to future technologies and the UK's critical national infrastructure and in defence and national security.
However, the deal could still be allowed to proceed if the government accepts Nvidia mitigation undertakings and assurances that it will not relocate ARM or reduce investment in UK.