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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1.
 
Why?
Jul 24, 2006, 09:09
1.
Why? Jul 24, 2006, 09:09
Jul 24, 2006, 09:09
 
I really think this is bad for the industry. I wish the CPU & GPU dudes wouldnt mix. This is about as wrong as two boys fucking in a church.

2.
 
Unless...
Jul 24, 2006, 09:10
2.
Unless... Jul 24, 2006, 09:10
Jul 24, 2006, 09:10
 
this somehow results in better onboard video on motherboards, I can't see what AMD is gonna get out of this.
------
Carpe Papilla

"@Dreagon - Comparing Oblivion to Deer Hunter was just ridiculous and you should be ashamed of yourself... it just made you look like a Class-A cunt." - theyarecomingforyou
3.
 
No subject
Jul 24, 2006, 09:12
3.
No subject Jul 24, 2006, 09:12
Jul 24, 2006, 09:12
 
Wonder if this upsets the staunch nVidia/AMD gamer cronies.

4.
 
Re: No subject
Jul 24, 2006, 09:17
4.
Re: No subject Jul 24, 2006, 09:17
Jul 24, 2006, 09:17
 
Yes I agree that it looks like another ready-made example for business textbooks in future years of a merger that in the end made no sense for either party.

5.
 
Scary...
Jul 24, 2006, 09:22
5.
Scary... Jul 24, 2006, 09:22
Jul 24, 2006, 09:22
 
I like AMD... I like ATI... But this shit scares me...

-Alamar

Avatar 22996
6.
 
Re: Scary...
Jul 24, 2006, 09:29
6.
Re: Scary... Jul 24, 2006, 09:29
Jul 24, 2006, 09:29
 
I like AMD... I like ATI... But this shit scares me...

Agreed.... I have an AMD processor, ATI video card, and nVidia motherboard....keep them all separate, thank you.

Edit: On a side note, I remember what some speculative article were saying was the benefit to AMD. This would, at least in theory, allow AMD to provide motherboard and motherboard chipsets (I know they used to on their own) for both desktop and laptop. This could give them a challenger to Intel's Centrino platform in the laptop category, while allowing them to offer companies like Dell and Compaq cheap integrated graphics solutions for low end desktops as well as more powerful CPU/mobo combos for their servers, much as intel does.

This comment was edited on Jul 24, 09:40.
7.
 
Re: Unless...
Jul 24, 2006, 09:36
7.
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...

8.
 
No subject
Jul 24, 2006, 10:06
8.
No subject Jul 24, 2006, 10:06
Jul 24, 2006, 10:06
 
Had to quickly mentally check that it wasn't April 4th after seeing this headline.

9.
 
Re: Unless...
Jul 24, 2006, 10:09
9.
Re: Unless... Jul 24, 2006, 10:09
Jul 24, 2006, 10:09
 
Wonder if this upsets the staunch nVidia/AMD gamer cronies.

I would think Intel/ATI gamer fans would be more concerned, especially now that Intel has the top gaming CPU to get. Ever see the NVIDIA friendly games and the 'bugs' ATI users run into? Imagine that happening with your next gen ATI cards with Intel...

It isn't even about intentional bugs introduced to compete. It's about AMD and ATI being part of the same company, working more closely, and Intel on the outside looking in. We'll soon see the what happens with ATI drivers on Intel machines compared to AMD.
This comment was edited on Jul 24, 10:44.
10.
 
Re: Why?
Jul 24, 2006, 10:24
10.
Re: Why? Jul 24, 2006, 10:24
Jul 24, 2006, 10:24
 
This move is actually fairly obvious. As other people have mentioned, it's all about the chipset side of the business. The GPU market isn't of real interest to CPU manufacturers. Yes, Intel did make a handful of graphics cards but they weren't really dedicated to the cause.

AMD can't build a chipset worth a damn to save their corporate soul. Anybody remember the 761/762 and what a raging pile of crap that was?

I wouldn't see this as upsetting either Intel or Nvidia very much since both of those companies make very solid, reliable chipsets. It's just AMD trying to get up to the next ledge to compete with Intel as a system integrator rather than as just a CPU manufacturer. I am not sure that AMD will be as successful as they hope they will be, given Intel's long expertise in matching motherboard and CPU performance. Especially not with ATi who, frankly, still has a lot to learn about how to design chipsets that are more than one trick ponies.

"Just take a look around you, what do you see? Pain, suffering, and misery." -Black Sabbath, Killing Yourself to Live.

“Man was born free, and he is everywhere in chains” -Jean-Jacques Rousseau
Avatar 21247
11.
 
No subject
Jul 24, 2006, 10:30
11.
No subject Jul 24, 2006, 10:30
Jul 24, 2006, 10:30
 
shocker

Avatar 14820
12.
 
No subject
Jul 24, 2006, 10:42
12.
No subject Jul 24, 2006, 10:42
Jul 24, 2006, 10:42
 

There are way too many ATI bugs everytime a major release computer game comes out. I'll pass on ATI.

13.
 
I'll sum this up
Jul 24, 2006, 10:47
13.
I'll sum this up Jul 24, 2006, 10:47
Jul 24, 2006, 10:47
 
NOOOOOOOOOOOOOOOOOOO!


YESSSSSSSSSSSSSSSSSS!


Meh.

14.
 
Re: No subject
Jul 24, 2006, 10:55
14.
Re: No subject Jul 24, 2006, 10:55
Jul 24, 2006, 10:55
 
No subject Jul 24, 10:06 A51Abductee

Had to quickly mentally check that it wasn't April 4th after seeing this headline.

What would the 4th matter?

This comment was edited on Jul 24, 10:56.
15.
 
Re:
Jul 24, 2006, 11:11
15.
Re: Jul 24, 2006, 11:11
Jul 24, 2006, 11:11
 
I think April Fools lasts longer where he's from;P

16.
 
Re: No subject
Jul 24, 2006, 11:23
16.
Re: No subject Jul 24, 2006, 11:23
Jul 24, 2006, 11:23
 

Wonder if this upsets the staunch nVidia/AMD gamer cronies.

It certainly has me concerned. I've been an AMD processor/Nvidia video user for years (due to getting the most bang for the buck) and I don't want Nvidia video cards to suddenly start having problems with (or not being "fully optimized" for) AMD procs ...


-----------------------------------
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17.
 
Re: No subject
Jul 24, 2006, 11:29
17.
Re: No subject Jul 24, 2006, 11:29
Jul 24, 2006, 11:29
 
If you're an nVidia/AMD user, just go nVidia/Intel for the next purchase. The new Intel CPUs are going to be the #1 gaming choice for a while anyways. I doubt the current generation of video cards are going to change much one way or another.

18.
 
FoxConn
Jul 24, 2006, 11:34
18.
FoxConn Jul 24, 2006, 11:34
Jul 24, 2006, 11:34
 
I heard that FoxConn is making there own video chipset, though the first reports are saying that its VERY oem (worse then sis/intell), but knowning them, and there leadtek range, give then a few gens, and we will be going nvidia, ati, or foxy?

19.
 
Isn't ATi larger than Nvidia?
Jul 24, 2006, 11:42
19.
Isn't ATi larger than Nvidia? Jul 24, 2006, 11:42
Jul 24, 2006, 11:42
 
And if so, wonder why AMD wouldn't pursue that venture? Maybe Nvidia doesn't want to sell etc.

I don't really see much of a gain here and AMD doesn't have the Intel type cash to do what they want. This could set AMD back quite a way right at the beginning of Intel taking back the CPU market. I love AMD, welcome their attack on Intel, but they need to be very careful.

20.
 
No subject
Jul 24, 2006, 11:45
20.
No subject Jul 24, 2006, 11:45
Jul 24, 2006, 11:45
 
Maybe they'll also buy ATI a competent driver authoring department. That's what finally chased me away from ATI several years ago: fantastic hardware with godawful driver support. It's like biting into a juicy prime rib steak and finding that it carries a faint odor of dog piss.

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