Microsoft Has Option to Acquire Nvidia - Documents

Microsoft Has Acquisition Deal with Nvidia

by Anton Shilov
06/06/2011 | 11:08 AM

Microsoft Corp. has an option to either acquire multimedia chip designer Nvidia Corp. or block any attempt to buy the developer of GeForce graphics chips by third parties, according to filing with Security and Exchange Commission. The possibility does not mean that Microsoft is about to acquire Nvidia or has such intentions in general.

 

"Under the agreement, if an individual or corporation makes an offer to purchase shares equal to or greater than 30% of the outstanding shares of our common stock, Microsoft may have first and last rights of refusal to purchase the stock," Nvidia said in the filing, dated May 27, reports InformationWeek web-site.

Redmond's purchase option automatically kicks in if a third-party offers $3.4 billion or more for the chipmaker's shares. It is unclear when the agreement was signed, but it is highly likely that the two companies inked the agreement after Nvidia became supplier of chipset for the original Xbox video game system as well as Zune personal digital media player.

Microsoft may need Nvidia in order to address the emerging market of media tablets as the company develops Tegra system-on-chip devices for such products. The chip designer would fit into Microsoft's communication market strategy that includes Skype as well as Windows 8 operating system for ARM-architecture microprocessors.

Nvidia and Microsoft did not comment on the news-story.