AMD Forced To Postpone Vote On Abu Dhabi Spinoff

This deal has been spinning on the back burner for years now, but unfortunately for AMD, the whole thing is going to be drawn out just a wee bit longer. If you'll recall, AMD had struck a number of deals that would essentially enable it to spinoff its manufacturing plants. Agreements had been made that would see Advanced Technology Investment, an Abu Dhabi state-owned venture capital firm, invest $2.1 billion (at least initially) for a 55.6 percent stake in the joint venture; out of that chunk, $700 million would head directly to AMD. Additionally, Mubadala Development Company -- yet another Abu Dhabi government company -- was planning to "buy 58 million additional shares of AMD and gain a seat on the company's board."

Earlier this week, AMD attempted to gather enough shareholder votes to approve the spinoff, with "attempted" being the key word here. The chip maker only heard from 42 percent of eligible voters, and obviously a majority vote is needed in order to approve the deal. Of the ones that did bother to cast their opinions, a staggering 97 percent were in favor, and it's easy to understand why. If AMD is finally able to free it hands somewhat from the capital intensive chip production business, that would greatly help the company as it attempts to return to profitability after nine consecutive quarterly losses.

AMD spokesman Drew Prairie confessed that it was probably responsible for the gaff: "We had set an aggressive schedule for the shareholder meeting. In retrospect, it was maybe too aggressive, and we need a little more time for stockholders to participate in the vote." For now, the shareholder meeting will be adjourned until February 18th in order to provide more time for investors to vote. According to Caris & Co. analyst Betsy Van Hees: "It's just a delay, and a delay that could consequently push out the closing date of the venture. We were largely expecting this to be just a formality, so this does certainly give us increasing cause for concern." It's largely believed that the new date will lead to complete passage of the deal, and that lingering cash infusion couldn't possibly come soon enough. After all, rival Intel just announced that it would be investing $7 billion in new fabrication plans -- better counter quick, AMD.
Via:  Dow Jones
3vi1 5 years ago

Intel announces increased investment in U.S. production, AMD counters with outsourcing manufacturing to Abu Dhabi.

Why is it that what's popular with major shareholders of U.S. companies is usually bad for the majority of their U.S. workers and the national economy in general?

AMDZFan 5 years ago

Well, if you think the failure of AMD and Intel gaining a monopoly (and thus, set whatever prices they want on processors) would be better than AMD outsourcing some of their business, then I'd hate to have you be the head of a major company...

Really though, AMD is pretty crippled right now, and they need to keep as mobile as possible to stay afloat.

3vi1 5 years ago

I never said it wasn't in their best interest. I said it wasn't in the best interest of American consumers/workers.

AMDZFan 5 years ago

Let me restate what I just said with more emphasis on the flaw of your arguement...

If you think the failure of AMD, *which would allow Intel to set whatever prices they want on processors* (think $500 for what we pay for a $200 processor now, or perhaps WORSE), is in the interest of American consumers, then I'd hate for you to be the head of a major company. Not to mention, if AMD went under, a large portion of the workers may be unable to find a job elsewhere (especially in this economy)... so, I'm thinking it's not in the best interest of the workers for AMD to fail either.

Yes yes, some workers lose their jobs. Better than all of them losing it, though... for sure.

3vi1 5 years ago

You seem to think that AMD is Intel's only competitor. $500 per processor would destroy everything they've been fighting for. x86 is not the world my friend.

bob_on_the_cob 5 years ago

3vi1 whats with all your flawed logic lately. Stick out tongue

jeremy 5 years ago

You're both reading a little too far into this IMHO. They're not oursourcing, they're spinning off part of their core business to a foreign corporation. I don't actually know where AMD's current fabrication facilities are, but I seriously doubt the new investors would want to arbitrarily shutter and move existing capital after paying so much to acquire already existing facilities.

My 2 cents, anyway.

3vi1 5 years ago

>> I don't actually know where AMD's current fabrication facilities are

I think they're in Germany, if memory serves. So, the decision probably hurts Germany worse than America.

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