AMD to Sell ZT Systems' Manufacturing Business to Sanmina

Source Credit : Reuters

On Monday, chipmaker AMD announced its decision to sell the data center infrastructure manufacturing division of the recently acquired ZT Systems to Sanmina in a significant $3 billion transaction. This strategic partnership positions Sanmina as a key collaborator in the development of advanced AI computing systems.

In accordance with the terms of the agreement, Sanmina will provide a total payment of $2.25 billion in cash, complemented by a premium of $300 million. This premium will be structured as a combination of 50% cash and 50% equity.

The agreement also encompasses a contingent consideration of $450 million, which is dependent on the financial performance of the business over the next three years.

In March, AMD successfully completed its acquisition of ZT Systems for $4.9 billion. Following this strategic move, the company announced its intention to divest its server manufacturing division, with plans to sell it once the acquisition is finalized. This decision reflects AMD's commitment to streamline its operations and focus on core business areas.

Shares of AMD were down 2.7% in premarket trading.