The $40bn (£29bn) takeover of the British silicon powerhouse Arm faces further delays as competition regulators in Brussels pack up for summer, stoking speculation that it could be forced to dust off plans for a float.

The buyer, the US microchip maker Nvidia, has still not submitted its paperwork to the European Commission. This is now unlikely before September, owing to EU summer holidays, which start on Monday.

Even after regulators receive the application, it could still be six months or longer before a decision is made.

Jonathan Branton, head of competition at law firm DWF, said: “No regulator will allow itself to be pushed into a corner and having to make a decision in a timeframe it’s not happy with.”

Nvidia has said the deal could take up to 18 months to close, around March 2022, with the option to extend until September 2022. It faces opposition from rivals who claim control of Arm’s crucial technology will unfairly skew the market in Nvidia’s favour.

Arm/Nvidia timeline (new)

Arm’s current owner, SoftBank of Japan, still hopes to complete the deal, which would make it a major shareholder in Nvidia. Its shares are up 50pc since the deal was announced.

However, deal insiders said that if delays and competition hurdles prove insurmountable, a stock market float remains under consideration. New York is viewed as the most likely venue, although one source said no formal process is underway.

Simon Segars, Arm’s chief executive, denied the possibility. 

He said: “There is no IPO planning going on at Arm, we are 100pc focused on closing this transaction.” 

Mr Segars has previously come out against a float, arguing Arm needs greater investment to expand into data centres and artificial intelligence that would not be possible as a public company.

Writing earlier this month, Mr Segars said: “The combination of Arm and Nvidia is a better outcome than an IPO [initial public offering]. The level of investment that will be needed to lead in artificial intelligence will be unprecedented.”

Arm, headquartered in Cambridge, designs processors used in billions of smartphones and is viewed as a critical part of the silicon supply chain.

Last week, the UK’s Competition and Markets Authority submitted a report to the Culture Secretary Oliver Dowden on whether the deal should be blocked in the interest of national security. Regulators in the US and China are also looking at the deal. A Government spokesman declined to comment on when the minister would decide on the regulator’s findings.

Nvidia and SoftBank declined to comment.