AMD announced the completion of the sale of its Digital TV (DTV) processor business to Broadcom, but the price is lower than the $192.8 million the firms agreed on in August. The parties agreed to reduce the purchase price by $51.3 million to $141.5 million in cash because Broadcom now anticipates AMD's DTV business will perform worse than expected.
Here's the statement from AMD:
AMD announced a definitive agreement to sell its DTV business on August 25 as part of its strategy to become leaner and more focused, while seeking to create a business model to deliver sustainable profitability and leadership in core x86 computing and graphics businesses.
In connection with the business sale, AMD received approximately $141.5 million in cash, subject to certain escrows and adjustments pursuant to the terms of the definitive asset purchase agreement.
And here's a snip from Broadcom's statement:
Broadcom now anticipates that AMD's DTV business will have fourth quarter revenue between $15 and $20 million, lower than previously expected. Accordingly, the parties agreed to reduce the purchase price from $192.8 million to $141.5 million in cash (in each case, minus certain accrued employee-related amounts). The anticipated dilutive impact to EPS of $0.04 to $0.05 per share in 2009, with the combined DTV business approaching EPS neutrality in the fourth quarter of 2009, has not changed. A portion of the consideration payable to AMD was placed into escrow pursuant to the terms of the definitive asset purchase agreement. Broadcom may record a one-time charge for purchased in-process research and development expenses related to the acquisition in the fourth quarter of 2008. The amount of that charge, if any, has not yet been determined.