“This acquisition of assets from AMD’s handheld business brings us strong multimedia technologies, including graphics cores that we have been licensing for several years,” said Steve Mollenkopf, executive vice president of Qualcomm and president of Qualcomm CDMA Technologies. “Bringing this technology in-house creates even greater synergy as we seamlessly integrate the best-in-class multimedia performance AMD offers into our system-on-chip (SoC) products.”
“With the sale of these handheld technology assets and resources to Qualcomm, we are better able to focus on our core business and leverage our unique position as a leader in both x86 computing and high-end graphics,” said Robert J. Rivet, chief operations and administrative officer, chief financial officer of AMD. “We believe the talented AMD Handheld employees will be a great asset to Qualcomm.”
Under the terms of the agreement, Qualcomm has extended offers of employment to various design and development teams from AMD’s handheld business. The teams are developing technologies to enhance mobile devices in areas including 2D and 3D graphics, audio/video, display, and architecture.
The two companies signed and closed a binding agreement on January 19, 2009, having already received required regulatory approvals. Cash consideration from Qualcomm to AMD, as part of the transaction, is $65 million, subject to adjustments for employee-related expenses and a holdback for certain customary indemnification obligations. Both AMD and Qualcomm are committed to a seamless transfer of business assets, as well as a smooth transition for employees.
Qualcomm expects the acquisition to be approximately $0.02 dilutive to pro forma earnings per share in fiscal 2009 and accretive to earnings by the second half of calendar year 2010.
About AMD
Advanced Micro Devices (NYSE: AMD) is an innovative technology company dedicated to collaborating with customers and partners to ignite the next generation of computing and graphics solutions at work, home and play. For more information, visit http://www.amd.com.
About Qualcomm
Qualcomm Incorporated (Nasdaq: QCOM) is a leader in developing and delivering innovative digital wireless communications products and services based on CDMA and other advanced technologies. Headquartered in San Diego, Calif., Qualcomm is included in the S&P 100 Index, the S&P 500 Index and is a 2008 FORTUNE 500 company. For more information, please visit http://www.qualcomm.com.
Cautionary Statement regarding Forward-Looking Statements
Except for the historical information contained herein, this news release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as “would,” “may,” “will,” “expects,” and other terms with similar meaning. Forward-looking statements include statements regarding the expected benefits of the transaction as they relate to enhancing Qualcomm's multimedia capabilities in order to deliver more advanced products; AMD’s or Qualcomm’s respective management plans relating to the transaction; any statements of the plans, strategies and objectives of AMD’s or Qualcomm’s management for future operations, including the execution of technology integration plans; the financial impact of the acquisition on AMD’s or Qualcomm's results of operations and financial condition; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements are based on AMD’s and Qualcomm’s respective current beliefs, assumptions and expectations and speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. If such risks or uncertainties materialize or such assumptions prove incorrect, the respective results of AMD or Qualcomm could differ materially from those expressed or implied by such forward-looking statements and assumptions.
Important factors that may cause such a difference for Qualcomm in connection with the acquisition of certain AMD’s Handheld Graphics and Multimedia Assets include, but are not limited to risks that:
• expected benefits may not materialize as expected;
• Qualcomm is not able to successfully implement technology integration strategies;
• Qualcomm is not able to successfully employ and retain the subject design and development teams from AMD's handheld business;
• Qualcomm is not able to successfully design and have manufactured significant quantities of CDMA and WCDMA components on a timely and profitable basis; and
• there are adverse changes in the economic conditions of the various markets Qualcomm serves.
