AMD to buy ATI for
about $5.4 billion is an example of the flood of news reports this morning
confirming rumors that Advanced Micro Devices is buying ATI Technologies. The
About AMD & ATI Page
on the ATI Website (thanks Mike Martinez) has a preliminary outline of where this
will lead, and here's the announcement:
NEW YORK (Reuters) - Advanced Micro Devices Inc (NYSE:AMD - news), the
No. 2 supplier of computer processors, said on Monday it would acquire graphics
chip maker ATI Technologies Inc. for $5.4 billion in cash and stock to expand
its product mix and grow market share as it battles Intel Corp. (Nasdaq:INTC -
news).
Under terms of the deal, AMD will acquire all of the outstanding common shares
of ATI (Nasdaq:ATYT - news) (Toronto:ATY.TO - news) for $4.2 billion in cash and
57 million shares of AMD common stock, based on the number of shares of ATI
common stock outstanding on July 21.
AMD said it would pay $20.47 for each ATI share. That marks a 24 percent premium
over ATI's closing stock price of $16.56 on Nasdaq on Friday. The stock added
another 7 percent to $17.68 in after-hours trading amid media reports of the
expected deal.
The consideration for each outstanding share of ATI comprises $16.40 in cash and
0.2229 shares of AMD common stock, the companies said.
AMD, the No. 2 supplier of computer processors, said it expects to finance the
cash portion of the transaction with a combination of cash and new debt.
AMD has obtained a $2.5 billion term loan commitment from Morgan Stanley Senior
Funding which, together with combined existing cash, cash equivalents, and
short-term investment balances of about $3 billion, provides full funding for
deal, it said.
ATI said it has agreed to a termination fee of $162 million. The deal is subject
to the approval of ATI shareholders and regulators in the United States and
Canada.
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