By Denny Jacob

Sanmina agreed to acquire ZT Systems' data center infrastructure manufacturing business from Advanced Micro Devices for up to $3 billion.

The manufacturing services provider will provide $2.25 billion of cash, $300 million consisting of an even split in cash and equity, and a $450 million contingent consideration based on financial performance of the business for the next three years.

Chip maker AMD will retain ZT Systems' AI systems design businesses and will work with Sanmina as a U.S.-based new production introduction manufacturing partner.

The acquisition of ZT's manufacturing business is expected to be accretive to adjusted EPS in the first year after closing, with further EPS accretion expected, said Sanmina.

The transaction was unanimously approved by Sanmina's board of directors. It is expected to close near the end of the 2025 calendar year.

The Sanmina equity issued to AMD will be subject to a lock-up period of 3 years, which begins at the time of closing. Equity sales will be limited to 33% in the first year, another 33% in the second year and the remaining equity in the third year.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

May 19, 2025 07:59 ET (11:59 GMT)

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