AMD has been strapped for cash since its $5.4 billion purchase of graphics chip company, ATI. The troubles facing the chipmaker has prompted rumors that Ruiz may be shown the door, notes TheStreet.com in a Nov. 14 story separate from the Mubadala investment. If Ruiz is ousted, president Dirk Meyer is the likely replacement.
Additionally, whether the investment will need the approval of the Committee for Foreign Investments in the U.S. is unclear. Mubadala claims a CFIUS review is unnecessary because it is not a controlling stake and it won't receive board representation, according to The Wall Street Journal. However, the Financial Times suggests a CFIUS review may be necessary because AMD, which makes computer processors, has contracts with the U.S. government. A contentious CFIUS review may only further agitate shareholders against Ruiz, so the chief better hope the Journal is right.
Mubadala's dealmaking illustrates the growing influence of sovereign wealth funds, which are investment vehicles managed by governments, on the U.S. economy. During The Deal's M&A Outlook 2008 conference, a panel of dealmakers discussed the impact SWFs are having on dealflow and what it could mean for both strategic buyers and buyout firms. — Matthew Wurtzel
See press release from Business Wire
See story from the Financial Times via MSNBC.com
See story from The Wall Street Journal
See related story about Ruiz from TheStreet
M&A Outlook 2008 podcast: Cross-border bonanza
See ATI-AMD story from TheDeal.com
Abu Dhabi's sovereign wealth fund Mubadala Development Co. has invested $620 million in struggling Advanced Micro Devices Inc. for a 8.1% stake. Will it stem the troubled company's loses, and help CEO Hector Ruiz stay on top?
