Broadcom to Acquire Digital TV Business from AMD
Broadcom Corporation and AMD today announced that the companies have entered into a definitive agreement for Broadcom to acquire AMD's digital TV (DTV) business.
The acquisition of AMD's DTV business is expected to enable Broadcom to immediately scale its DTV business, and, in conjunction with its existing products, to offer a complete product line that covers all segments of the DTV market ranging from low-end value and mid-range quality to high-end interactive platforms and panel processors. The acquisition also is intended to expand Broadcom's existing tier one customer base, which includes the top DTV brands worldwide. This deal aims to enhance and strengthen Broadcom's innovative DTV system solution offerings while delivering the scale and focus needed to forge a market-leading DTV business.
In connection with the transaction, approximately 530 members of AMD's dedicated DTV team, in addition to certain employees directly supporting this team, located in six primary design centers around the world, will be invited to join Broadcom. AMD's DTV product line includes all Xilleon integrated DTV processors and complete turnkey reference designs, as well as NXT receiver ICs, the Theater 300 DTV processor, and a line of panel processors that perform advanced motion compensation, frame rate conversion and scaling.
"AMD is executing a strategic plan to transform the company, becoming leaner and more focused while seeking to create a business model to deliver sustainable profitability," said Dirk Meyer, President and Chief Executive Officer of AMD. "The sale of our DTV business is a key step in AMD's transformation, helping to strengthen our balance sheet, lower our breakeven point, and hone our focus in order to take full advantage of our position as a leader in both microprocessors and graphics technology. Broadcom will be a great fit for our talented DTV employees and the DTV products they have created."
In connection with the acquisition, Broadcom will pay approximately $192.8 million in cash in exchange for AMD's DTV assets. A portion of the consideration payable to AMD will be placed into escrow pursuant to the terms of the definitive asset purchase agreement. The board of directors of each company has approved the transaction and shareholder/stockholder approval of the transaction is not required by either company. The closing, which is targeted to occur during Broadcom's fourth quarter ending December 31, 2008, remains subject to customary closing conditions and review by relevant regulatory organizations. Broadcom may record a one-time charge for purchased in-process research and development expenses related to the acquisition in the quarter in which the transaction closes. The amount of that charge, if any, has not yet been determined.
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