Nvidia’s $40B arm deal is dead; what does this mean to the future of the company?

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News reports surfaced over the past 24 hours that the $40 billion NVIDIA Corporation (NASDAQ:NVDA)-Arm deal, which ranks among the most costly tech deals ever, is in jeopardy. Due to regulatory pressure, Nvidia is reportedly considering exiting the deal. So, what does it signify for tech mergers and acquisitions if this deal fails to go through?

International regulators effects on M&A

Let’s not forget that about this time last year, Visa cancelled a $5.3 billion acquisition of Plaid after the US Justice Department gave it a closer look than the credit card giant was comfortable with.

Additionally, Microsoft’s proposed $20 billion acquisition of Nuance Communications was recently halted by the United Kingdom’s antitrust authorities. That contract is still in limbo while the company determines what to do with it, and the country’s Competition and Markets Authority (CMA) may launch a probe as well.

In the case of Nvidia’s deal, it’s worth mentioning that EU officials approved the deal without conditions last month. Despite this, Nvidia is now under considerably closer examination from international regulators, who are concerned that the combined company would upset the competitive balance in the chip market.

It’s not surprising that Nvidia is deciding to walk away from this deal, due to regulatory pressure. It’s evident that companies are getting tired of too many bureaucratic processes.

Nvidia stock technical analysis

Source – TradingView

Looking at the yearly chart performance, the short term trend is negative; the long term trend is neutral. This means that nothing exciting is going on here. However, NVDA did better than 93% of all other stocks. We also observe that the gains produced by NVDA over the past year are nicely spread over this period. 

NVDA is currently trading in the middle of its 52-week range. This is in line with the S&P 500 Index, which is also trading in the middle of its range.

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