AMD (NYSE: AMD) today announced it has closed its Asset Smart strategictransaction with the Advanced Technology Investment Company (ATIC) and MubadalaDevelopment Company of Abu Dhabi, setting the stage for the formal launch ofthe world’s only U.S.-headquartered semiconductor foundry, temporarily called“The Foundry Company.” The Foundry Company is expected to formally launchand disclose its new name and visual identity later this week.
AMDreceived $700 million from ATIC for a portion of its ownership interests in TheFoundry Company, The Foundry Company assumed responsibility for the repaymentof approximately $1.1 billion of associated AMD debt, and Mubadala paid AMDapproximately $125 million for 58 million newly issued AMD shares and warrantsfor 35 million additional shares.
“Withthe close of this historic transaction, AMD and its committed partners haveconceived two strong industry-leading companies capable of charting futurecourses that will dramatically improve the technology industry,” said DirkMeyer, president and chief executive officer of AMD. "Our ‘AssetSmart’ strategy is about more than providing AMD with long term access toworld-class, leading-edge semiconductor manufacturing that is foundational toour growth strategy. It is about transforming the industry. ATIC isthe ideal partner to help scale AMD’s forty years of semiconductor expertise,and provide a manufacturing foundation for the entire industry to produce thenext generation of semiconductor innovations. We are proud of our vision,the opportunities we are creating around the world, and fortunate to haveastute, committed strategic partners in Mubadala and ATIC, and we are delightedto welcome Mubadala to the board of AMD. We are confident that this strategyand partnership will enable AMD to achieve long-term success based on designingand integrating industry-leading computing and graphics technologies thatdeliver compelling user experiences.”
Final Asset Smart Transaction Terms OverviewUpon closing, AMD:
· Improvesits cash position by approximately $825 million, excluding its consolidation ofthe operations of The Foundry Company for financial reporting purposes, throughATIC’s $700 million payment for a portion of AMD’s ownership interests in TheFoundry Company and Mubadala’s purchase for approximately $125 million of 58million newly issued AMD shares of common stock and warrants for 35 millionadditional shares;
· Willappoint a Mubadala designee as a member of its board of directors; and
· Hasthe option, but not any requirement, to provide additional capital funding toThe Foundry Company in response to future capital calls.
Upon closing, The Foundry Company:
· Hasa total enterprise value of approximately $4.3 billion, consisting of AMD'scontribution of manufacturing assets and liabilities, (including itsfabrication facilities in Dresden), intellectual property and employees valuedtogether at approximately $1.8 billion; ATIC's contribution of $1.4 billion innew capital; and approximately $1.1 billion of debt assumed by The FoundryCompany from AMD;
· Willbe consolidated with AMD for purposes of financial reporting;
· Hasa board of directors whose membership is equally divided betweenrepresentatives appointed by AMD and ATIC;
· Hasonly AMD and ATIC as stockholders, each of which owns 50 percent of theoutstanding shares of The Foundry Company and has a 50 percent voting interestin The Foundry Company;
· Isowned 34.2 percent by AMD and 65.8 percent by ATIC on a fully converted tocommon shares basis. ATIC’s fully converted ownership may increase over timebased on the differences in securities held by AMD and ATIC, and depending onwhether AMD elects to invest proportionately with ATIC in future capitalinfusions to support The Foundry Company’s growth.
Cautionary Statement
This release contains forward-lookingstatements concerning the company’s planned products and technologies, whichare made pursuant to the safe harbor provisions of the Private SecuritiesLitigation Reform Act of 1995. Forward-looking statements are commonlyidentified by words such as "would," "may,""expects," "believes," "plans," "intends,""projects" and other terms with similar meaning. Investors arecautioned that the forward-looking statements in this release are based oncurrent beliefs, assumptions and expectations, speak only as of the date ofthis release and involve risks and uncertainties that could cause actualresults to differ materially from current expectations. Risks include thepossibility that Intel Corporation's
pricing, marketing and rebating programs,product bundling, standard setting, new product introductions or otheractivities targeting AMD's business will prevent attainment of AMD's currentplans; the company's Asset Smart strategy will be less beneficial thananticipated; customers stop buying the company's products or materially reducetheir 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 requiredby 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 currentlyexpected; there will be unexpected variations in market growth and demand forthe company's products and technologies in light of the product mix that it mayhave available at any particular time or a decline in demand; and the companywill be unable to maintain the level of investment in research and developmentthat is required to remain competitive. Investors are urged to review in detailthe risks and uncertainties in the company's Securities and Exchange Commissionfilings, including but not limited to the Annual Report on Form 10-K for thefiscal year ended December 27, 2008.
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About AMD
AdvancedMicro Devices (NYSE: AMD) is an innovative technology company dedicated tocollaborating with customers and technology partners to ignite the nextgeneration of computing and graphics solutions at work, home and play. For moreinformation, visit http://www.amd.com.
About ATIC
TheAdvanced Technology Investment Company (ATIC) was created in 2008. A technologyinvestment company wholly owned by the Government of Abu Dhabi, ATIC is focusedon making significant investments in the advanced technology sector, bothlocally and internationally. Its mandate is to generate returns that deliverlong-term benefits to the Emirate of Abu Dhabi.
ATICseeks to leverage the unique advantages it enjoys as an investor from theEmirate of Abu Dhabi to identify and realize long-term investment opportunitiesin the highly competitive and capital-intensive advanced technology sector.These advantages include significant and reliable capital, a patient investmentphilosophy, and a subsequently long-term investment horizon. For moreinformation about ATIC visit http://www.advancedtechnologyic.com
About “The Foundry Company”
TheFoundry Company will be a U.S.-headquartered, leading-edge semiconductorfoundry. The Foundry Company will combine advanced process technology andindustry-leading manufacturing facilities. The cornerstone of productionfor The Foundry Company will be industry-leading manufacturing facilities inDresden, Germany with future plans to expand that campus as well as build astate-of-the art facility in Saratoga County, New York. Upon closing, TheFoundry Company will have its principal headquarters in Silicon Valley; and itsresearch and development and manufacturing leadership teams and ecosystems inNew York, Dresden, and Austin.
About Mubadala Development Company
MubadalaDevelopment Company (Mubadala) is a Public Joint Stock Company headquartered inAbu Dhabi, capital of the United Arab Emirates. Its focus is on developing andmanaging an extensive and economically diverse portfolio of commercial initiatives.It does this either independently or in partnership with leading internationalorganizations. Mubadala’s commercial strategy is fundamentally built onlong-term capital-intensive investments that deliver strong financial returns.
Thecompany manages a multi-billion dollar portfolio of local, regional, andinternational investments, projects and initiatives. Through its investment anddevelopment projects, Mubadala is both a catalyst for, and a
reflectionof, the drive for economic diversification of the Emirate of Abu Dhabi.Its impact is evident domestically and internationally in sectors such asenergy, aerospace, real estate, healthcare, technology, infrastructure, andservices.
Mubadala’ssole shareholder is the Government of the Emirate of Abu Dhabi. For moreinformation about Mubadala, its partnerships and activities please visit http://www.mubadala.ae.
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