AMD Completes Chip Sale for Digital TV Sets

Deal valued at $140 million

Tuesday, Oct 28, 2008  |  Updated 10:17 AM PDT
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AMD Completes Chip Sale for Digital TV Sets

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AMD has said it was selling the unit as part of a program to reduce debt and improve profitability. The company is a distant second to Intel Corp. in its main market of computer processors, and competition has intensified.

Advanced Micro Devices Inc. said Tuesday it had completed the sale of its unit that makes chips for digital TV sets to fellow chip maker Broadcom Corp. for a reduced price of $141.5 million in cash.

When the deal was announced Aug. 25, the companies said the unit would be sold for $192.8 million in cash.

But Broadcom now anticipates that the DTV business will have fourth quarter revenue between $15 million and $20 million, lower than previously expected.

It said the parties agreed to reduce the purchase price as a result.

Broadcom said the anticipated dilutive impact to earnings per share of 4 cents a share to 5 cents a share in 2009 has not changed. That includes expectations that the combined DTV business will approach earnings per share neutrality in the fourth quarter of 2009.

A portion of the money payable to AMD was placed into escrow pursuant to the terms of the companies' agreement.

Broadcom said it may record a one-time charge for purchased in-process research and development expenses related to the acquisition in the fourth quarter of this year. The amount of that charge, if any, has not yet been determined.

AMD has said it was selling the unit as part of a program to reduce debt and improve profitability. The company is a distant second to Intel Corp. in its main market of computer processors, and competition has intensified.

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