Feeds

AMD to buy ATI

Cash'n'shares purchase totals $5.4bn

  • alert
  • submit to reddit

Top three mobile application threats

AMD and ATI are to tie the knot, the two companies confirmed this morning, ending weeks of frenzied speculation in the process. The merged business will form a "formidable" competitor to Intel, Nvidia and other chip makers, the pair suggested.

Well, maybe. And then only if both firms' shareholders approve the board-recommended acquisition, which will see AMD take on "technologies, people and complementary strengths". Both boards approved the plan "unanimously", AMD said.

If approved, the deal will see AMD buy all outstanding ATI shares - which closed on Friday at $18.26 - for $4.2bn in cash and 57m AMD shares. ATI shareholders will be offered $16.40 in cash and 0.2229 AMD shares for every single ATI share they hold.

AMD said it will use some of its own cash reserves and take on new debt to fund the cash component of the deal. Morgan Stanley Senior Funding has promised the company $2.5bn, and AMD has $3bn in the bank.

ATI will pay AMD $162m if the deal doesn't go through as planned, and the acquisition is expected to be completed during Q4 2006, the pair said.

AMD and ATI stressed the financial advantages of the merged business: together, the two posted sales totalling $7.3bn in the last four quarters, and bringing the two together will shave $75m off their total operating expenses by the end of 2007, they calculate.

AMD is certain to annoy its other chipset partners, Nvidia, VIA and SiS, but if they can compete with Intel, they can compete with a new AMD that is also producing its own chipsets. AMD's recent marketshare gains means it's ready to take the next step forward, and that means greater control of platforms, not just processors, just as its arch-rival has.

AMD has long wanted to emulate Intel's success with Centrino, for example, and this deal makes it possible to start doing so, in a variety of market segments. It also picks up a thriving GPU business and ATI's endeavours to break into other markets, such as consumer electronics and mobile phones - don't forget its recent tie-in with Nokia. ®

Combat fraud and increase customer satisfaction

More from The Register

next story
Samsung Galaxy S5 fingerprint scanner hacked in just 4 DAYS
Sammy's newbie cooked slower than iPhone, also costs more to build
Microsoft lobs pre-release Windows Phone 8.1 at devs who dare
App makers can load it before anyone else, but if they do they're stuck with it
Leaked pics show EMBIGGENED iPhone 6 screen
Fat-fingered fanbois rejoice over Chinternet snaps
Feast your PUNY eyes on highest resolution phone display EVER
Too much pixel dust for your strained eyeballs to handle
Report: Apple seeking to raise iPhone 6 price by a HUNDRED BUCKS
'Well, that 5c experiment didn't go so well – let's try the other direction'
US mobile firms cave on kill switch, agree to install anti-theft code
Slow and kludgy rollout will protect corporate profits
Rounded corners? Pah! Amazon's '3D phone has eye-tracking tech'
Now THAT'S what we call a proper new feature
Oh no, Joe: WinPhone users already griping over 8.1 mega-update
Hang on. Which bit of Developer Preview don't you understand?
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Sony battery recall as VAIO goes out with a bang, not a whimper
The perils of having Panasonic as a partner
prev story

Whitepapers

Designing a defence for mobile apps
In this whitepaper learn the various considerations for defending mobile applications; from the mobile application architecture itself to the myriad testing technologies needed to properly assess mobile applications risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.