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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Re: Unless...
Jul 24, 2006, 09:36
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Re: Unless... Jul 24, 2006, 09:36
Jul 24, 2006, 09:36
 
this somehow results in better onboard video on motherboards, I can't see what AMD is gonna get out of this.

While ATi is mostly popular (or not, I am an Nvidia guy) for the video cards, they also build chipsets for the AMD platform. And AMD does not produce any chipsets themselves, as Intel is doing, so they have always been at the whim of other companies to make their own products run. With this move they all of a sudden can get a foot into the integrated graphics market as well as create chipsets for their own CPUs.

We will only have to wait and see what will become of the nForce after this, for example...

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