AMD reduces stake in The Foundry Co

09 December 2008

Intel's major rival, semiconductor maker Advanced Micro Devices Inc (AMD) has announced amendments to its joint venture agreement with Abu Dhabi government-owned Advanced Technology Investment Co., (ATIC) and Mubadala Development Co, signed in October this year.

Under the amended deal, AMD will now own a reduced 34.2-per cent stake and ATIC around 65.8-per cent stake in the newly created The Foundry Co's fully-converted common stock.

However, AMD and ATIC will each have equal voting rights at the close of the transaction.

Previously, ATIC was to hold 55.6 per cent of Foundry upon completion, while the remaining 44.4 per cent stake would be owned by AMD.

While the amendment will result in ATIC getting a bigger stake in the newly formed joint venture company, Mubadala will still purchase 58 million AMD shares as part of the deal, but it will do so at a revised stock price: either the average for the 20 days leading up to and including 12 December or the average in the 20 days before the deal closes, whichever is lower.

AMD will also issue to Mubadala an additional 5 million warrants to purchase AMD stock, for a total of 35 million warrants.