[XS/AMD] AMD Closes Foundry Company Transaction

1835 Views 31 Replies 22 Participants Last post by Licht, Mar 6, 2009

Slappa

Discussion Starter · Mar 3, 2009

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The Release

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
• Has the option, but not any requirement, to provide additional capital funding to The Foundry Company in response to future capital calls.

Upon closing, The Foundry Company:
• 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.

CAUTIONARY STATEMENT
This release contains forward-looking statements concerning the company's planned products and technologies, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "would," "may," "expects," "believes," "plans," "intends," "projects" and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this release are based on current beliefs, assumptions and expectations, speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include the possibility that Intel Corporation's
pricing, marketing and rebating programs, product bundling, standard setting, new product introductions or other activities targeting AMD's business will prevent attainment of AMD's current plans; the company's Asset Smart strategy will be less beneficial than anticipated; customers stop buying the company's products or materially reduce their operations or demand for its products; the company will be unable to develop, launch and ramp new products and technologies in the volumes and mix required by the market and at mature yields on a timely basis; demand for computers and, in turn, demand for the company's products will be lower than currently expected; there will be unexpected variations in market growth and demand for the company's products and technologies in light of the product mix that it may have available at any particular time or a decline in demand; and the company will be unable to maintain the level of investment in research and development that is required to remain competitive. Investors are urged to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the fiscal year ended December 27, 2008.

About AMD
Advanced Micro Devices (NYSE: AMD) is an innovative technology company dedicated to collaborating with customers and technology partners to ignite the next generation of computing and graphics solutions at work, home and play. For more information, visit http://www.amd.com.

About ATIC
The Advanced Technology Investment Company (ATIC) was created in 2008. A technology investment company wholly owned by the Government of Abu Dhabi, ATIC is focused on making significant investments in the advanced technology sector, both locally and internationally. Its mandate is to generate returns that deliver long-term benefits to the Emirate of Abu Dhabi.

ATIC seeks to leverage the unique advantages it enjoys as an investor from the Emirate of Abu Dhabi to identify and realize long-term investment opportunities in the highly competitive and capital-intensive advanced technology sector. These advantages include significant and reliable capital, a patient investment philosophy, and a subsequently long-term investment horizon. For more information about ATIC visit http://www.advancedtechnologyic.com

About "The Foundry Company"
The Foundry Company will be a U.S.-headquartered, leading-edge semiconductor foundry. The Foundry Company will combine advanced process technology and industry-leading manufacturing facilities. The cornerstone of production for The Foundry Company will be industry-leading manufacturing facilities in Dresden, Germany with future plans to expand that campus as well as build a state-of-the art facility in Saratoga County, New York. Upon closing, The Foundry Company will have its principal headquarters in Silicon Valley; and its research and development and manufacturing leadership teams and ecosystems in New York, Dresden, and Austin.

About Mubadala Development Company
Mubadala Development Company (Mubadala) is a Public Joint Stock Company headquartered in Abu Dhabi, capital of the United Arab Emirates. Its focus is on developing and managing an extensive and economically diverse portfolio of commercial initiatives. It does this either independently or in partnership with leading international organizations. Mubadala's commercial strategy is fundamentally built on long-term capital-intensive investments that deliver strong financial returns.
The company manages a multi-billion dollar portfolio of local, regional, and international investments, projects and initiatives. Through its investment and development projects, Mubadala is both a catalyst for, and a
reflection of, the drive for economic diversification of the Emirate of Abu Dhabi. Its impact is evident domestically and internationally in sectors such as energy, aerospace, real estate, healthcare, technology, infrastructure, and services.
Mubadala's sole shareholder is the Government of the Emirate of Abu Dhabi. For more information about Mubadala, its partnerships and activities please visit http://www.mubadala.ae.

And Also...

"Today represents a new start for AMD, meaning AMD the Product Company. After a long journey we see our Asset Smart strategy coming to fruition with the birth of a new semiconductor manufacturer, The Foundry Company." - Nigel Dessau's Blog @ http://links.amd.com/Dawn

Source

Credit goes to Simon (64NOMIS) from AMD for posting this over at XS.

This should be good news for this recession. Hope AMD can make a strong comeback with these changes.

Also, There will be a investor relations webcast this Thursday regarding the deal.

Quote:

AMD to Host a Webcast in Relation to the Closing of The Foundry Company Manufacturing Joint Venture Transaction

SUNNYVALE, Calif. -- March 2, 2009 --AMD (NYSE: AMD) today announced that Bob Rivet, Chief Operations and Administrative Officer and Chief Financial Officer, will host a conference call at 1 p.m. PT (4:00 p.m. ET) on Thursday, March 5, 2009 to discuss the plans for AMD's financial reporting, starting in the first fiscal quarter of 2009, taking into account the consummation of The Foundry Company manufacturing joint venture.

A real-time audio webcast of the presentation will be available on amd.com on the Investor Relations Homepage page: http://www.amd.com/us-en/Corporate/I...51_306,00.html

A replay of the webcast can be accessed after the conclusion of the live event and will be available for 30 days after the conference call. About AMD Advanced Micro Devices (NYSE: AMD) is an innovative technology company dedicated to collaborating with customers and partners to ignite the next generation of computing and graphics solutions at work, home and play. For more information, visit http://www.amd.com. AMD, the AMD Arrow logo, AMD Opteron and combinations thereof, are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and may be trademarks of their respective owners.

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