UAE Company Takes 8.1% Stake in AMD

AMD is welcoming some new investors based in Abu Dhabi who are
sinking $622 million into the chipmaker.

It all amounts to about an 8.1 percent stake in the Sunnyvale,
Calif.-based AMD by Mubadala Development Company, a strategic investment and
development company headquartered in Abu Dhabi, the capital of the United
Arab Emirates (UAE). The company received 49 million newly issued shares at
a price per share of $12.70, the closing price of AMD on Thursday.

AMD said it received about $608 million after reimbursing Mubadala for
approximately $14.6 million in expenses. The company plans to use the cash
from the stock sale “for general corporate purposes including accelerating
its long-term, customer-focused growth strategy by investing in R&D, product
innovations and manufacturing excellence.”

AMD has been struggling to stay profitable, despite market share gains
against its rival Intel. In the third quarter, for example, AMD reported
revenues of $1.63 billion, a 23 percent increase from the same quarter in
2006 and an 18 percent improvement from the second quarter.

But expenses due to manufacturing transitions and the ongoing cost of its
ATI acquisition ate into the bottom line, resulting in an operating loss of $226 million, and a net loss of $396 million, or 71 cents a

In a statement, AMD Chairman and CEO Hector Ruiz said AMD proudly
welcomes Mubadala to the AMD shareholder family. “This investment
strengthens AMD’s ability to deliver customer-centric innovation and choice
to the marketplace, creating greater value for all of our shareholders.”

Mubadala CEO and Managing Director Khaldoon Khalifa Al Mubarak said, “AMD
is a great fit for Mubadala’s investment approach – a spirited competitor
and innovator led by a strong and visionary management team. We see
significant opportunities for long-term growth and value creation.”

AMD stressed that the investment wouldn’t give the company any sort of
majority or representation on the board of directors, which means the
transaction does not present a controlling investment or acquisition subject
to review by the Committee on Foreign Investment in the U.S. (CFIUS).

Shares of AMD were $12.69, off by a penny in early trading action Friday
after the announcement.

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