AMD to Acquire ATI Technologies
Rumored for months, the deal quickly takes from AMD having no presence in the graphics chip segment to being one of the top players. Not only should the move position the company to better compete against Intel -- which has in recent years become one of the leading graphics chip providers -- but it also gives AMD a stake in faster growing but smaller markets, such as chips for digital televisions and cell phones.
"Bringing these two great companies together will allow us to transcend what we have accomplished as individual businesses and reinvent our industry as the technology leader and partner of choice," said AMD CEO Hector Ruiz in a statement.
"This combination means accelerated growth for ATI," said the company's CEO, Dave Orton, in the statement. "Joining with AMD will enable us to innovate aggressively on the PC platform, and continue to invest significantly in our consumer business to stay in front of our markets."Under the deal announced Monday, AMD will spend about $5.4 billion to acquire ATI, including $4.2 billion in cash and 57 million shares of stock. The consideration amounts to about $20.47 for each share of ATI, including about $16.40 in cash and about .22 shares of AMD stock. That would represent a premium of about 23% on ATI's closing share price Friday of $16.56. ATI's stock jumped on the news, rising $2.87, or 17%, to $19.43 in early trading on Monday. AMD's shares were off 78 cents, or 4%, in recent trading. The deal has been approved by the boards of both companies, but is subject to regulatory approval. The companies expect the deal to close in the fourth quarter this year.
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