AMD spin off gets go-ahead

 

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By Stuart Turton

Posted on 20 Feb 2009 at 10:45

AMD shareholders have officially approved the company's plan to spin off its chip manufacturing business.

AMD announced the plan to split its chip design and manufacturing business back in July, and formed a $5 billion joint venture with an Abu Dhabi-based firm to form the new Foundry Company.

Under the agreement, Advanced Technology Investment will invest $2.1 billion for a 65.8% stake of the newly formed company, with $700 million heading directly to AMD which will use it to settle existing debts.

Despite the importance of the deal for AMD's business, the company had to put back the decision last week due to dismal shareholder turnout.

Only 42% of its shareholders voted in the last meeting, which was not enough for the majority consensus AMD needs to approve the plans.
The recalled vote saw just over 50% of shareholders approve the decision, allowing it to go through.

The transaction is expected to close 2 March.

There's no word yet on Intel's plans regarding the company. The chip giant wrote a letter to AMD requesting a meeting to discuss whether its plans to create a new Foundry Company violated their cross-licensing pact, however in a statement Intel claims it "has not and does not intend to block or in any other way hinder the formation of the Foundry Co".