US tech giant closes in on £30bn deal to buy Britain's Arm amid fears over Cambridge HQ

The Government should intervene in Arm's potential sale to US chip firm Nvidia to ensure that British jobs and its Cambridge headquarters are protected, MPs have urged.

Talks between UK chip designer Arm and US firm Nvidia are accelerating with a $40bn (£30bn) deal expected to be thrashed out by the end of the month.

Negotiations between the Cambridge microprocessor designer, which is owned by Japan’s SoftBank, and Nvidia, the Silicon Valley firm that builds graphics chips, are understood to have been exclusive for the last fortnight. Arm's designs are used in billions of chips in nearly every smartphone and other gadgets.

The exclusivity period is expected to last 30 to 45 days, after which the companies would walk away or the talks would open to other parties.

However, the deal has resurfaced an agreement made between Britain's Takeover Panel and SoftBank that said Arm's headquarters would remain at its base in Cherry Hinton in Cambridge and double UK staff numbers to around 3,500 by 2021.

Daniel Zeichner, the Labour MP for Cambridge, told The Telegraph the Government should ensure these terms were enforced in the event of a sale. He said: “Arm is an iconic company. So far, SoftBank have kept to the post-offer undertaking. [Job] numbers have risen in Cambridge. But now it is not clear. If they do not roll them over then what was the point of them?”

Earlier this week, Mr Zeichner wrote to Alok Sharma, the Business Secretary, asking for assurances that Arm would not be sold again and that the Government should encourage a UK bid to take control of at least 50pc of the firm.

An Arm spokesperson declined to comment on whether the undertakings would carry on in the event of sale. SoftBank and Nvidia declined to comment.

It is understood the Government is monitoring the progress of the deal, although since Arm would be being sold to a US company it would almost certainly not raise national security concerns, despite its highly strategic technology.

Chi Onwurah, Labour Shadow Minister for science, said: “It is being sold to a competing company with competing interests and we don't have any assurances. The Government should be doing something.”

She added the UK should tap other industry players and investors who would consider a buyout that would keep Arm's headquarters in Britain.

Sources said SoftBank boss Masayoshi Son was seeking a price tag of around $40bn for Arm. It snapped up the former blue chip for £24bn in 2016.

That figure would represent a small profit, but it would be a modest return compared to the performance of other listed chip firms and technology companies in the last four years.

Arm said it did not comment on rumours or speculation. The Evening Standard reported on Friday a deal was “on course to be complete by the end of the summer”.

On Tuesday, SoftBank confirmed it was considering a sale, partial sale or a float of Arm, but did not name who it was in talks with.

SoftBank put Arm on the block in April, hiring Goldman Sachs to sound out potential buyers for the business. The Japanese company is understood to have pitched a deal to Apple, but it declined. It also tried to form a consortium of bidders including Samsung, Google and Qualcomm. But only talks with Nvidia have progressed. SoftBank could also offer a stake of 5pc to 10pc in Arm instead of a full sale.

Industry leaders have expressed concerns that if Arm was sold to Nvidia it would be weakened in the long term. Arm’s customers are Nvidia’s rivals, who may baulk at licencing its chip designs from their competitor.