IBM Takeover of AMD Speculations Arise
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From: Richard P on 25 Jan 2008 08:13 sprite scaler wrote: > > IBM Takeover of AMD Speculations Arise > > Speculations that microchip maker AMD might be bought by IBM surfaced > the last couple of days, rising AMD's stock shares by 8% yesterday. > > Neither parties have commented on the rumour, which however proved to > be enough to offer AMD's share a a significant boost. At the same > time, IBM's stock was down yesterday by 1.7 percent on the New York > Stock Exchange. > > Some analysts have predicted that with AMD shares being so low, it > might be a good time for IBM to acquire them. IBM has had a research > and development expense-sharing agreement with AMD. AMD might want to > use IBM's East Fishkill, New York, chip-fabrication plant to build > microprocessors, in an effort to stengthen its position against rival > Intel, who currently has 12 chipmaking plants across the globe, > compared to AMD's single chip fabrication plant in Germany. > > On the other hand, IBM's recent policy to move away from hardware and > manufacturing and moving to software and solutions, make the > acquisition a low-probability event. IBM sold its computer hard disk > business to Hitachi in 2002 and its PC business to China's Lenovo > Group in 2005. Last year, IBM sold its printer business to Japan's > Ricoh. Earlier Wednesday, IBM said it was buying privately held > AptSoft Corp to expand its business event processing software > portfolio. > > Mergermarket.com, a mergers-focused news service, reported on the > Financial Times' Web site that IBM and AMD could strengthen their > current partnership. > > "A deal could see IBM's microelectronics division merge with AMD at > some point, possibly in the near term," mergermarket.com correspondent > David Zielenziger wrote, citing "industry sources." > > http://www.cdrinfo.com/Sections/News/Details.aspx?NewsId=22347 > > > > > By Philipp Gollner and Duncan Martell > > SAN FRANCISCO (Reuters) - Advanced Micro Devices shares rose as much > as 8 percent on Wednesday on speculation that the microchip maker > might be bought by IBM, but analysts said the chances of an > acquisition were slim. > > Spokesmen for IBM and AMD, based in Sunnyvale, California, declined to > comment on the rumor. > > Shares of AMD, the second-largest maker of microprocessors after Intel > Corp , added as much as 55 cents to $7.39 and were up 23 cents or 3.4 > percent at $7.07 in afternoon trading. International Business Machines > Corp stock was down $1.73 or 1.7 percent at $99.58 on the New York > Stock Exchange. > > "The takeover of AMD by IBM has been mentioned before and with AMD > shares being so low, it might be a good time for IBM to acquire them," > said William Lefkowitz, options strategist at brokerage firm vFinance > Investments in New York. > > AMD call options were trading higher than usual because of the rumor, > he added. > > IBM of Armonk, New York, has had a research and development expense- > sharing agreement with AMD, and analysts have speculated that AMD > might want to use IBM's East Fishkill, New York, chip-fabrication > plant to build microprocessors. > > An acquisition of AMD would be "a pretty low-probability event because > IBM is moving away from hardware and manufacturing and moving to > software and solutions," said Ashok Kumar, an analyst at CRT Capital > Group. "I don't think IBM wants the bragging rights to go up against > Intel." > > "IBM buying AMD is a nonstarter," Kumar said. "There's no rationale > for that. Investors would just pound IBM's stock." > > > IBM has been exiting computer hardware businesses to focus on higher- > profit software and technology services tailored to clients. > > Earlier Wednesday, IBM said it was buying privately held AptSoft Corp > to expand its business event processing software portfolio. > > Revenue from IBM's microelectronics business fell 15 percent in the > fourth quarter. The unit mainly supplies chips to run IBM's mainframe > computers and business server machines. > > IBM sold its computer disk-drive business to Hitachi Ltd in 2002 and > its personal-computer business to China's Lenovo Group Ltd in 2005. > Last year, IBM sold its printer business to Japan's Ricoh Co Ltd > (7752.T: Quote, Profile, Research). > > An acquisition of AMD would "destroy shareholder value for IBM," Kumar > said. "That argument is a nonstarter." > > AMD has said it would give details of its "asset-light" manufacturing > strategy sometime this year. AMD currently has a chip fabrication > plant, or fab, in Germany and has plans to build another one outside > Albany, New York. > > Intel, by comparison, has some 12 chipmaking plants across the globe, > and its manufacturing prowess has long been a competitive advantage > against smaller rival AMD. > > Mergermarket.com, a mergers-focused news service, reported on the > Financial Times' Web site that IBM and AMD could strengthen their > current partnership. > > "A deal could see IBM's microelectronics division merge with AMD at > some point, possibly in the near term," mergermarket.com correspondent > David Zielenziger wrote, citing "industry sources." > > http://www.reuters.com/article/hotStocksNews/idUSN2341197920080123 > > > Newest Reuters wire claims IBM is considering a purchase of struggling > AMD > > Few will argue that AMD's image and profitability are not what they > used to be. AMD was having issues prior to its purchase of graphics > maker ATI and things have only worsened since the ATI purchase. > > DailyTech reported last week that AMD posted a massive loss for Q4 > 2007 of $1.72 billion while rival Intel posted significant profits > across its operations. Between new architectures and aggressive > pricing, a shakeup in the microprocessor arena is almost certain for > 2008. > > Reuters now reports IBM is possibly considering a buyout of > floundering AMD and some say this would be an ideal time for the > buyout with AMD stock prices at a low. IBM and AMD currently have a > research and development expense-sharing deal in place. This is not > the first time rumors of an IBM buyout of AMD have circulated. > > Other companies have their eye on AMD as well. Texas Instruments and > Freescale have both expressed interest in turning AMD around. > > Analyst Ashok Kumar from CRT Capital Group claims, "[IBM buying AMD > is] a pretty low-probability event because IBM is moving away from > hardware and manufacturing and moving to software and solutions. I > don't think IBM wants the bragging rights to go up against Intel." > > IBM sold its hard drive making business to Hitachi in 2002 and sold > its PC business to Lenovo in 2005. According to Kumar an IBM purchase > of AMD would "destroy shareholder value for IBM. > > http://www.dailytech.com/Report+IBM+Could+Make+a+Move+for+AMD+Analysts+Doubtful/article10456.htm Can't see this happening to be honest. If it however does happen it could lead to interesting times ahead.
From: J. Clarke on 25 Jan 2008 08:47 Richard P wrote: <news items snipped> > Can't see this happening to be honest. If it however does happen it > could lead to interesting times ahead. Would be nice. If anybody can fix ATI's drivers it's IBM. -- -- --John to email, dial "usenet" and validate (was jclarke at eye bee em dot net)
From: mr deo on 25 Jan 2008 15:17 > > Can't see this happening to be honest. If it however does happen it > > could lead to interesting times ahead. > > Would be nice. If anybody can fix ATI's drivers it's IBM. > > If anyone can break IBM's list of solid products it's AMD
From: Steven Stone on 25 Jan 2008 19:46 IBM sold off their PC division to Lenovo. Why would they want AMD ?
From: J. Clarke on 26 Jan 2008 02:51
Steven Stone wrote: > IBM sold off their PC division to Lenovo. Why would they want AMD ? To make bucks selling chips to Lenovo? IBM doesn't seem to be in any rush to divest their semiconductor business. -- -- --John to email, dial "usenet" and validate (was jclarke at eye bee em dot net) |