AMD confirms ATI deal

AMD has confirmed its plan to acquire graphics giant ATI in a deal valued at approximately US$5.4 billion. AMD claims that the deal will create a processing powerhouse bringing together technology leadership in microprocessors alongside ATI’s strengths in graphics, chipsets and consumer electronics.

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By  Stuart Wilson Published  July 24, 2006

AMD has confirmed its plan to acquire graphics giant ATI in a deal valued at approximately US$5.4 billion. AMD claims that the deal will create a processing powerhouse bringing together technology leadership in microprocessors alongside ATI’s strengths in graphics, chipsets and consumer electronics. “ATI shares our passion and complements our strengths: technology leadership and customer centric innovation,” said Hector Ruiz, chairman and CEO at AMD. “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. We believe AMD and ATI will drive growth and innovation for the entire industry, enabling our partners to create differentiated solutions and empowering our customers to choose what is best for them.” “This combination means accelerated growth for ATI, and broader horizons for our employees,” said Dave Orton, president and CEO of ATI. “All of our product lines will benefit. 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.” “Windows Vista will deliver incredible advances in the user experience as a result of advancements in graphics integration and performance,” commented Jim Allchin, co-president of Microsoft’s platforms and services division. “We're excited by the potential of what AMD and ATI can deliver together to enhance the Windows Vista experience for our customers even further.” Under the terms of the deal, AMD will acquire all of the outstanding common shares of ATI for a combination of US$4.2 billion cash and 57 million AMD shares. AMD has secured a US$2.5 billion loan commitment from Morgan Stanley Senior Funding, which, together with its US$3 billion balance of cash, cash equivalents and short-term investments, will fully finance the deal. ATI has agreed to pay AMD a termination fee of US$162m under circumstances specified in the acquisition agreement.

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