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AMD to Buy ATI

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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25. AMD to Buy ATI Jul 24, 2006, 12:05 FREAKHEAD
 
The reason AMD didn't go with the obvious choice, nVidia, is that they couldn't afford them. They don't have the financial power to purchase them, even if nVidia wanted to sell.

The obvious reason for this is to gain market share as a system integrator. I love AMD for my home stuff and for gaming, etc. And as a former "white box" system builder for a small PC company, its all I cared to push. However now, as a Tech/MCP who builds servers and desktops for businesses, we can't use AMD b/c they don't make their own chipset/motherboard.

You can and some do use nVidia, VIA, etc but boards change so much and so often and some boards need certain tweaking and models change constantly. Intel offers a fair selection that rarely changes and that consistancy makes support a lot easier, especially with Intel's advanced RMA replacement.

Again, I LOVE AMD but it just hasn't been a viable solution verses the reliablilty of an Intel made motherboard.

This deal makes me excited b/c I may be able to offer a great AMD/AMD solution to my customers as opposed to AMD/MSI/DFI/Gigabyte insert constantly changing motherboard models. A consistant reliable motherboard solution is what I want and need. Especially for SBS server market. The server motheboard selection leaves much to be desired atm.

 
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