A flurry of M&A activity sees Nvidia buy ARM for $40bn, Gilead acquire Immunomedics for $21bn and TikTok team up with Oracle to avoid (it hopes) a US ban
- Introduction: Three important deals
- TikTok: ByteDance ‘to partner with Oracle’ in US
- Job cut fears as Nvidia buys ARM
- ARM founder: It’s a disaster
European stock markets have also begun the week brightly, with gains across the board.
In London, the FTSE 100 index has jumped by 42 points or 0.7% to 6037 points, its highest level in nearly three weeks.
M&A appears to be the main focus as we start a new week with US pharma company Gilead Sciences buying cancer drug maker Immunomedics for $21bn, while Softbank appears to have finally agreed a price with US graphics chip maker NVidia, for UK chip company ARM Holdings of $40bn, as it seeks to bolster its balance sheet after a rather troubled 2019, as well as the recent scrutiny of its big derivative bets on some big US tech shares.
Softbank shares have moved sharply higher in Asia trading this morning on news of the sale, however this optimism needs to be tempered.
Stock markets across the Asia-Pacific region rallied today, with Softbank leading the way.
Shares in Softbank jumped by 9%, as traders applauded the sale of Arm to Nvidia.
ARM founder Hermann Hauser adds that Boris Johnson’s government should block Nvidia’s acquisition:
“This is a UK company, it’s clearly in the national interest that it stays a UK company, so the government clearly has the power to prevent that [the deal]”
Hermann Hauser, ARM’s co-founder, says the sale of ARM to a US firm was an “absolute disaster for Cambridge, the UK and Europe”.
He warned that it would lead to job losses in the UK, destroy the UK firm’s business model and impinge on UK economic sovereignty. Any promises made on jobs are “meaningless unless they are legally enforceable,” pointing to the takeover of Cadbury by US company Kraft in 2010.
“The headquarters [will] move to the United States as they inevitably will when ARM becomes a division of Nvidia. This will lead to job losses in Cambridge, Manchester, Belfast, Warwick where ARM employs thousands of people.
Secondly, Nvidia will destroy ARM’s business model… which is being the Switzerland of the semiconductor industry of dealing with over 500 licensees, most of which are competitors of Nvidia.
“Which means that if hundreds of UK companies that incorporate ARM in their products want to export it to anywhere in the world including to China which is a major market, this decision on whether they are allowed to export it will be made in the White House, and not in Downing Street.”
https://t.co/3husABs2lg ARM, crown jewel of UK tech, sold on by Softbank to Nvidia for $40billion. Deal described by cofounder Hermann Hauser as a disaster - he's writing to 10 Downing Street warning it will destroy the firm's business model and make Britain "a US vassal state."
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The City has woken up to an dealmaking frenzy this morning, with three tie-ups with serious ramifications well beyond the markets being announced.
The Washington Post reported that Oracle had been chosen by ByteDance as a ‘“technology partner” to allay US concerns, and Reuters quoted a source as saying it would be a restructuring rather than a sale, with Oracle handling TikTok’s US user data. The source did not disclose how much of TikTok’s US operations ByteDance and its investors would continue to own.
ByteDance will need approval for the deal from both Washington and Beijing. It is not clear whether Trump, who wants a US technology company to own most of TikTok in the United States, will approve the proposal.
Related: TikTok: ByteDance 'to partner with Oracle' in US after rejecting Microsoft bid
https://t.co/3husABs2lg ARM, crown jewel of UK tech, sold on by Softbank to Nvidia for $40billion. Deal described by cofounder Hermann Hauser as a disaster - he's writing to 10 Downing Street warning it will destroy the firm's business model and make Britain "a US vassal state."
“Trodelvy is an approved, transformational medicine for a form of cancer that is particularly challenging to treat.
We will now continue to explore its potential to treat many other types of cancer, both as a monotherapy and in combination with other treatments.
Gentle recovery as trials resume.
European Opening Calls:#FTSE 6059 +0.45%#DAX 13278 +0.57%#CAC 5068 +0.68%#AEX 554 +0.42%#MIB 19938 +0.59%#IBEX 6986 +0.62%#OMX 1805 +0.18%#STOXX 3335 +0.58%#IGOpeningCall
from Mergers and acquisitions | The Guardian https://ift.tt/33pHSqb
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