Downturn Saves Broadcom $51.3M in AMD Deal

Broadcom Corp. (BRCM)  has completed its purchase of Advanced Micro Devices Inc.'s (AMD) digital TV business -- at a considerably lower price than originally agreed upon. Back in August, when the company first announced the acquisition, it said it would pay $192.8 million in cash for the unit, which would help it significantly expand its business by offering a comprehensive digital TV product line. 

Tuesday, however, Broadcom said the price has been pared by more than 25%, to $141.5 million, reflecting the unit's new and significantly lower financial expectations. Broadcom says it expects the former AMD unit to post fourth-quarter revenue $15 million to $20 million below what had previously been expected.

It could be a sign of things to come in other pending deals. As we reported on Monday, Brocade Communications Corp. (BRCD) may be in the process of renegotiating its $3 billion cash-and-stock purchase of Foundry Networks Inc. (FDRY) to include less stock and more cash. -- Andrea Orr

See Oct. 28 statement from Broadcom on AMD unit purchase
See Oct. 27 post on Foundry and Brocade from Tech Confidential
See Aug. 24 post on Broadcom's purchase of AMD unit from Tech Confidential