American technology company NVIDIA's planned $40 billion takeover of British chip designer Arm Ltd. faces months of delays after the U.K. government asked competition regulators Tuesday to investigate the national security implications of the deal.
U.K. Digital Secretary Nadine Dorries asked the Competition and Markets Authority to look into both the deal's impact on competition and national security. NVIDIA has agreed to buy Cambridge-based Arm, Britain's largest technology firm, from Japan's Softbank.
Arm's semiconductor technology is widely used in computing devices, including smartphones, cars and other equipment that connects to the internet. While many of the devices that use Arm technology aren't considered critical, the government is concerned about the "security and resiliency" of the broader supply chain, the Department for Digital, Culture, Media & Sport said in a statement.
"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 in a statement. "The CMA will now report to me on competition and national security grounds and provide advice on the next steps.''
Once the 24-week inquiry is completed, the minister will have to decide what, if any, conditions should be placed on the deal to protect the public interest.
