DOW JONES NEWSWIRES
Advanced Micro Devices Inc. (AMD) appointed former 3Com Corp.
(COMS) Chief Executive Bruce Claflin as chairman, as the
semiconductor maker closed a deal that will effectively let it spin
off its manufacturing facilities into a joint venture.
Claflin succeeds former AMD Chief Executive Hector Ruiz, who
retired from the board to become chairman of the board of the
Foundry Co., a company encompassing the manufacturing facilities
that AMD is forming with the Advanced Technology Investment Co., an
Abu Dhabi investment fund. The deal includes an investment by
Mubadala Development Co., also of Abu Dhabi.
Waleed Al Mokarrab, Mubadala's chief operating officer, was
appointed to AMD's board.
The spinoff was designed to improve AMD's balance sheet and
refocus the company on designing chips, instead of making them. In
January, the company reported a $1.42 billion fourth-quarter loss,
hurt by a rapidly deteriorating environment for computer sales as
well as big write-offs.
Foundry Co. is expected to formally launch, with a new name and
visual identity, later this week.
AMD received $700 million from Advanced Technology for a portion
of its ownership interests in the Foundry Co., which assumed
responsibility for repaying about $1.1 billion of AMD debt.
Mubadala paid AMD about $125 million for 58 million newly issued
AMD shares and warrants for 35 million additional shares.
AMD's shares were at $2.07, up 3%, in after-hours trading. The
stock price has fallen 74% since June.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com