AMD Closes “Asset Smart” Transaction – Fulfills Vision to Create Two Leadership Companies Capable of Delivering Transformative Innovation and Impact to the Global Technology Industry
— AMD and Advanced Technology Investment Company form well-resourced U.S. based global semiconductor manufacturing services company —
— Strategic partner Mubadala Development Company increases stake in AMD —
SUNNYVALE, Calif. — Mar. 2, 2009 — AMD (NYSE: AMD) today announced it has closed its Asset Smart strategic transaction with the Advanced Technology Investment Company (ATIC) and Mubadala Development Company of Abu Dhabi, setting the stage for the formal launch of the world’s only U.S.-headquartered semiconductor foundry, temporarily called “The Foundry Company.” The Foundry Company is expected to formally launch and disclose its new name and visual identity later this week.
AMD received $700 million from ATIC for a portion of its ownership interests in The Foundry Company, The Foundry Company assumed responsibility for the repayment of approximately $1.1 billion of associated AMD debt, and Mubadala paid AMD approximately $125 million for 58 million newly issued AMD shares and warrants for 35 million additional shares.
“With the close of this historic transaction, AMD and its committed partners have conceived two strong industry-leading companies capable of charting future courses that will dramatically improve the technology industry,” said Dirk Meyer, president and chief executive officer of AMD. " Our ‘Asset Smart’ strategy is about more than providing AMD with long term access to world-class, leading-edge semiconductor manufacturing that is foundational to our growth strategy. It is about transforming the industry. ATIC is the ideal partner to help scale AMD’s forty years of semiconductor expertise, and provide a manufacturing foundation for the entire industry to produce the next generation of semiconductor innovations. We are proud of our vision, the opportunities we are creating around the world, and fortunate to have astute, committed strategic partners in Mubadala and ATIC, and we are delighted to welcome Mubadala to the board of AMD. We are confident that this strategy and partnership will enable AMD to achieve long-term success based on designing and integrating industry-leading computing and graphics technologies that deliver compelling user experiences.”
Final Asset Smart Transaction Terms Overview
Upon closing, AMD:
Improves its cash position by approximately $825 million, excluding its consolidation of the operations of The Foundry Company for financial reporting purposes, through ATIC’s $700 million payment for a portion of AMD’s ownership interests in The Foundry Company and Mubadala’s purchase for approximately $125 million of 58 million newly issued AMD shares of common stock and warrants for 35 million additional shares;
Will appoint a Mubadala designee as a member of its board of directors; and
Upon closing, The Foundry Company:
Has the option, but not any requirement, to provide additional capital funding to The Foundry Company in response to future capital calls.
- Has a total enterprise value of approximately $4.3 billion, consisting of AMD's contribution of manufacturing assets and liabilities, (including its fabrication facilities in Dresden), intellectual property and employees valued together at approximately $1.8 billion; ATIC's contribution of $1.4 billion in new capital; and approximately $1.1 billion of debt assumed by The Foundry Company from AMD;
Will be consolidated with AMD for purposes of financial reporting;
Has a board of directors whose membership is equally divided between representatives appointed by AMD and ATIC;
Has only AMD and ATIC as stockholders, each of which owns 50 percent of the outstanding shares of The Foundry Company and has a 50 percent voting interest in The Foundry Company;
Is owned 34.2 percent by AMD and 65.8 percent by ATIC on a fully converted to common shares basis. ATIC’s fully converted ownership may increase over time based on the differences in securities held by AMD and ATIC, and depending on whether AMD elects to invest proportionately with ATIC in future capital infusions to support The Foundry Company’s growth.