Singapore's competition watchdog clears AMD's $4.9 bln acquisition of ZT Systems

Singapore's competition regulator has approved Advanced Micro Devices Inc's (NASDAQ:AMD ) (AMD) proposed acquisition of server maker ZT Group International (ZT Systems) for $4.9 billion, saying the transaction will unlikely lessen market competition.

AMD, a global semiconductor company, announced in August 2024 its intention to acquire ZT Systems for $4.9 billion in a cash and stock transaction. This strategic move aims to bolster AMD's capabilities in the rapidly expanding artificial intelligence (AI) and data center markets, positioning the company to better compete with industry leader Nvidia (NASDAQ:NVDA ).

ZT Systems specializes in designing and manufacturing customized server and storage solutions for large-scale data centers, commonly referred to as hyperscalers. The integration of ZT Systems' expertise is expected to enhance AMD's ability to deliver comprehensive AI infrastructure solutions to its global clientele.

The Competition and Consumer Commission of Singapore (CCCS) initiated a public consultation on November 26, 2024, to assess the potential impact of the acquisition on market competition within Singapore. The consultation period concluded on December 10, 2024, during which stakeholders were invited to provide feedback.

After a thorough review, the CCCS concluded that the acquisition would not infringe upon Singapore's competition laws, thereby granting its approval.

"It is unlikely that the merged entity will be able to leverage market power in one market via a tying or bundling strategy to profitably increase sales in another market," the regulator said in a statement.

This approval marks a significant milestone in the acquisition process, bringing AMD closer to finalizing the deal, which is anticipated to conclude in the first half of 2025, pending approvals from other regulatory bodies.

Source: Investing.com