#1 AMD buys ATI
Posted: Tue Jul 25, 2006 3:23 am
No, goddamit. I ain't kidding ya.
reuters wrote: NEW YORK (Reuters) - Advanced Micro Devices Inc (AMD.N: Quote, Profile, Research), 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. (INTC.O: Quote, Profile, Research).
Under terms of the deal, AMD will acquire all of the outstanding common shares of ATI 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 per share for each share of ATI (ATYT.O: Quote, Profile, Research) (ATY.TO: Quote, Profile, Research). 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 is comprised of $16.40 of cash and 0.2229 shares of AMD common stock, the companies said.
Talk of a tie-up between the two companies first emerged in May, but many industry analysts have said it made little financial or strategic sense for AMD to buy ATI outright.
In addition to making graphics chips, ATI also supplies chipsets -- the cluster of secondary chips and interfaces that surround a computer's processor -- for AMD and Intel products.