Labour urges government to step in to ensure ARM retains its British headquarters as SoftBank agrees sale to Silicon Valley-based Nvidia
UK-based chip designer ARM, whose designs power most of the world’s smartphones, is to be sold to Nvidia in a cash-and-stock deal that has already attracted controversy from MPs and two of the company’s co-founders.
The agreement between Nvidia and ARM’s current owner, Japan’s SoftBank, values ARM at up to $40 billion (£31.2bn), four years after SoftBank acquired ARM for $32bn.
Nvidia said it plans to keep ARM’s headquarter in the UK, to bring in more staff and to retain the ARM brand.
It said the deal would create “the premier computing company for the age of artificial intelligence”.
“ARM will remain headquartered in Cambridge,” Nvidia chief executive Jensen Huang said in a statement.
“We will expand on this great site and build a world-class AI research facility, supporting developments in healthcare, life sciences, robotics, self-driving cars and other fields.”
Last week Labour had urged the UK government to step in to ensure that ARM remainde headquartered in the UK in the event of a sale to Nvidia.
Labour’s Ed Milliband said the government should end its “silence” over the deal and obtain “legally binding assurances” about ARM’s continued UK presence.
It should ensure any deal is “not exploitative” and protects jobs, he said.
ARM employs 3,000 staff in the UK, nearly half of its 6,500 employees worldwide.
The 2016 sale to SoftBank was approved on the condition that the company retain its UK base and double its British staff in five years.
Labour said ARM is a “key national asset” and warned the lack of assurances this time around “rings further alarm bells”.
The party pointed out that ARM currently supplies designs to many of Nvidia’s direct competitors, in addition to Nvidia itself, raising questions around ARM’s growth prospects under such an arrangement.
ARM co-founders Tudor Brown and Hermann Hauser have also said the company should not be sold to a semiconductor firm, but should remain a neutral supplier to the industry.
“If the government truly believes in an active industrial policy, it cannot be right that they are ignoring the potential consequences of this takeover, including the possible implications for where the company is headquartered and the thousands of jobs in Britain that depend on it,” Miliband said.
“The government should show leadership and seek legally binding assurances from Nvidia should it take over the company to keep ARM headquartered in the UK rather than see jobs and decision-making moved across the ocean.”
Labour claimed that Nvidia bought Bristol-based Icera in 2011 and then in 2015 sacked its entire UK staff of more than 300.
The Prospect union said it had written to business escretary Alok Sharma expressing “deep concerns” over the deal.
“This government has made much of its industrial strategy and ambition to make the UK a superpower in science and technology,” said Prospect general secretary Mike Clancy.
“These are ambitions we share, but they cannot be achieved if the fate of companies like ARM and its thousands-strong workforce is left to the market alone to dictate.
“It would be irresponsible for the government to take a hands-off approach to a company that accounts for around 2 per cent of total UK private sector R&D spending.”
The government said it monitored all acquisitions and would investigate if warranted.
“While proposed acquisitions are primarily a commercial matter for the parties concerned, the government monitors these closely,” a government spokesman said.
“Where we feel a takeover may represent a threat to the UK, the government will not hesitate to investigate the matter further, which could lead to conditions on the deal.”