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Tuesday, June 30, 2015

Feds Clear GlobalFoundries to Acquire IBM Chip Unit

Posted By on Tue, Jun 30, 2015 at 7:59 AM

An entrance to IBM's Essex plant - FILE: MATTHEW THORSEN
  • File: Matthew Thorsen
  • An entrance to IBM's Essex plant
The federal government has cleared GlobalFoundries to take over IBM's chipmaking business, the company announced Monday, removing a final obstacle to a blockbuster deal struck last fall

"The transaction is expected to close in the near future," GlobalFoundries wrote in a brief press release posted to its website.

The two companies announced last October that IBM would pay GlobalFoundries $1.5 billion to take its money-losing chip unit — including its Essex, Vt., plant — off its hands. Because GlobalFoundries is owned by the Emirate of Abu Dhabi, it first needed to obtain clearance from the Committee on Foreign Investment in the United States, an inter-agency panel charged with protecting national security in major commercial transactions.

"With the conclusion of the CFIUS review, the companies have completed the regulatory process in the United States," GlobalFoundries said in Monday's statement. "All necessary regulatory approvals outside the United States were previously received."

Precisely when the deal will close remains unclear. Neither company responded to requests for comment last week. The Poughkeepsie Journal, which first reported news of the federal approval Monday, wrote earlier this month that it was expected to close July 1. 

Vermont officials said last week that they remain in the dark about the timing of the sale.

"I don't have anything official other than what I've read," Secretary of Commerce Pat Moulton said last Wednesday.

Moulton stressed that everything she has heard about the pending transaction has been positive. IBM employs roughly 4,000 people at the the Essex plant, several hundred of whom are expected to continue working for Big Blue even after the sale. The rest are expected to find a new home at GlobalFoundries.

"We are hearing only good news and we continue to hear they have offered jobs to everybody on the IBM campus," Moulton said of GlobalFoundries. "They hope to continue to invest in the plant and hope to continue to add jobs."

GlobalFoundries spokesman Travis Bullard said last October that the company had "no plans to reduce the workforce at this time."


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About The Author

Paul Heintz

Paul Heintz

Bio:
Paul Heintz is a staff writer and political editor for Seven Days. He wrote the "Fair Game" political column from May 2012 through December 2016.

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