SUNNYVALE, Calif. (AP) -- Chip maker Advanced Micro Devices Inc. said Monday it will end up owning less of its factories than previously negotiated after they're spun off into a venture with the investment arm of the Persian Gulf state of Abu Dhabi.
In addition, the terms under which Abu Dhabi fund Mubadala will invest directly in AMD also have been renegotiated, with the fund now buying 58 million AMD common shares at a lower price than the $5.41 per share originally agreed upon.
The Oct. 6 deal was amended to reflect "changes in today's challenging economic environment," said AMD spokesman Drew Prairie. AMD shares were trading Monday morning at $2.10, down 3 cents. They hit a multi-decade low of $1.62 two weeks ago.
Now, Mubadala will pay AMD's average stock price during the month before the transaction closes, or before Dec. 12, whichever is lower. As originally agreed, Mubadala would have ended up with a 19.3 percent share of AMD, but now will get a far larger stake. Mubadala also will receive warrants to buy 35 million AMD shares, up from 30 million as previously agreed upon.
Chip companies are reported plunging demand across the industry. AMD, the chief competitor of market-dominant Intel Corp. in the market for computer processors, has been plagued with persistent losses.
The value of the manufacturing assets AMD is contributing to the new Foundry Co. will be worth less under the renegotiated terms with investor Advanced Technology Investment Co. AMD now will end up owning 34.2 percent of the venture, down from 44.4 percent as previously expected.
ATIC is still paying $2.1 billion to buy its stake in Foundry, and still will have equal voting rights in the company with AMD.
