Some positive news came out of the financial markets today with AMD stock rising 8.5% after the announcement that the company is partnering with an Abu Dabi investment firm. The two companies are entering a partnership dubbed "The Foundry" that will involve all of AMD's factories worldwide. This brings good news to the company that has fallen in value since the acquisition of ATI in 2006.
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As a part of the deal, Advanced Technology Investment will invest $2.1 billion over the next five years for a stake in Foundry, and will also assume about $1.2 billion of AMD's existing debt. In addition, Mubadala Development, another Abu Dhabi investing entity, will fork over $314.0 million to more than double its current stake in AMD to 19.3%, from 8.1%. Though Foundry's board will have an equal number of executives from AMD and the Abu Dhabi fund, AMD will own just 44.4% of the company, and Advanced Technology Investment will have the larger 55.6% stake.
The deal represents a deepening of the relationship between the chipmaker and Abu Dhabi--in November, another government-controlled vehicle called Mubadala Investment bought an 8.1% stake in AMD for $622 million.
AMD's 2006 acquisition of graphics chip maker ATI Technologies has hurt earnings. The acquisition, which involved divisions that make chips for cellphones and digital television sets, soured as both underperformed and AMD had to write-down their value by $880.0 million.
By contrast, Intel fell about a point today, but maintains a much larger market share over AMD.The deal represents a deepening of the relationship between the chipmaker and Abu Dhabi--in November, another government-controlled vehicle called Mubadala Investment bought an 8.1% stake in AMD for $622 million.
AMD's 2006 acquisition of graphics chip maker ATI Technologies has hurt earnings. The acquisition, which involved divisions that make chips for cellphones and digital television sets, soured as both underperformed and AMD had to write-down their value by $880.0 million.
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