The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition.
As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday.
ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of those technology giants, the commission said.
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After acquiring ZT, AMD would still face strong competition from market leaders — Intel Corp, the world’s biggest supplier of CPUs used in data centers, and Nvidia Corp, the top supplier of graphics processing units (GPUs) for data centers, the commission said.
In addition, AMD’s local suppliers expect their business partnerships with the new entity would remain intact following the merger, it said, adding that some suppliers have said the deal would not block their access to the market.
“As the merger of the companies would not fan fears of hindering competition, the commission would not ban the consolidation,” it said.
The strategic deal marks the next major step in AMD’s artificial-intelligence (AI) strategy to deliver leadership AI training and inferencing solutions based on innovating across silicon, software and systems, the company said in August last year.
ZT’s extensive experience designing and optimizing cloud computing solutions would also help cloud and enterprise customers significantly accelerate the deployment of AMD-powered AI infrastructure at scale, it said.
AMD said it expects the transaction to be accretive on a non-GAAP basis by the end of this year. The US firm has agreed to acquire ZT in a cash and stock transaction valued at US$4.9 billion, inclusive of a contingent payment of up to US$400 million based on certain post-closing milestones.
Inventec Inc (英業達), the biggest shareholder of ZT with a 10 percent share, said it would book NT$13.16 billion (US$398 million) in disposal gains from the deal.
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