EU watchdog faces British chipmaker row as the FTSE 600 edges higher

The Bundesnetzagentur (BND) wants to keep British chipmaker ARM Group’s independence. Here’s what the agency wants to do…

The German federal intelligence agency, BND, warned potential investors in chipmaker ARM Group Ltd on Tuesday against acquiring the firm as Nvidia Corp. plots a takeover, according to people familiar with the matter.

An alliance between BND and the country’s antitrust authority would help protect the independence of the Cambridge, England-based company’s chip technology, the people said, asking not to be identified as the deliberations are private.

F.T.C. Sues to Block Nvidia’s Takeover of Arm

Britain’s FTSE 100 index rose as much as 0.4% to its highest since November 2007 on the prospect of a deal between the German chipmaker and the US maker of gaming graphics chips. Nvidia surged as much as 17% in extended trading, while ARM climbed as much as 5.2% in London.

BND, which has until late February to intervene with the acquisition, has concerns related to how the deal could change the pricing power of Nvidia and other technology rivals, the people said. The agency isn’t against the merger, but wants to prevent a monopoly position forming between the semiconductor firm and its chip-set competitors, the people said.

Representatives of Nvidia and BND declined to comment. The German antitrust agency had no immediate comment.

ARM CEO Andrew Benett speaks during the Allen & Co. conference in Sun Valley, Idaho in August. Photographer: Ethan Miller/Getty Images

ARM’s split from Intel Corp. in 2000 created a basic chip architecture that’s been licensed to most of the biggest chipmakers. The loss of the technology contributed to Intel’s slump as competitors muscled in on its turf. The company had a market capitalization of £11.5bn on Tuesday.

Nvidia is already a major supplier of graphical processing units, or GPUs, to phone makers, TV makers and supercomputers, and also develops high-performance computer systems.

The US company has been aggressively acquiring companies to get a foothold in the higher-margin area of data centers to serve machine learning and artificial intelligence applications. Its acquisitions include Mellanox Technologies Ltd., Mellanox Semiconductor Ltd. and, in September, CSR Plc.

German sportswear company Puma SE, Nvidia’s biggest shareholder, said last week that it was considering making a bid for ARM.

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