In a joint statement the two companies commented, “While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development.”
Under terms of the agreement, AMD and Intel obtain patent rights from a new 5-year cross license agreement, Intel and AMD will give up any claims of breach from the previous license agreement, and Intel will pay AMD $1.25 billion. Intel has also agreed to abide by a set of business practice provisions. As a result, AMD will drop all pending litigation including the case in U.S. District Court in Delaware and two cases pending in Japan. AMD will also withdraw all of its regulatory complaints worldwide. The agreement will be made public in filings with the Securities and Exchange Commission.
BOTH stocks are up today. The street is happy to see Intel put this behind them at a cost equal to just 1% of the company's market value. AMD is up 22%. That $1.25 billion is $1.89 per share, and yesterday's closing price was $5.32 per share. The stock is up only 1.22 instead of the full 1.89 due to likely taxes on the cash payout.
Good news all around here.