AMD confirms ATI buyout

Written by Tim Smalley

July 24, 2006 | 14:07

Tags: #announcement #buyout #ceo #confirmation #dave #hector #merger #orton #plans #ruiz

Companies: #amd #ati

Earlier this morning, AMD and ATI announced plans to join forces in a deal worth $5.4 billion.

Rumours have been rife for a long time now and a number of reliable sources indicated that the deal had been done on Friday.

AMD believes that the combination will create a "processing powerhouse", by combining the two company's strengths to create a formidable platform during 2007.

AMD Chairman and CEO Hector Ruiz said that "ATI shares our passion and complements our strengths: technology leadership and consumer centric innovation.

"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."

ATI's President and CEO Dave Orton continued by saying that "This combination means accelerated growth for ATI, and broader horizons for our employees. 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."

The deal was unanimously approved by the board of directors at both AMD and ATI and is subject to approval from ATI's share holders. In order to complete the $5.4 billion deal - which combines $4.2 billion in cash and $57M in AMD shares - AMD has obtained a $2.5 billion loan from Morgan Stanley making The Inquirer's beliefs true - AMD didn't have enough money in the bank to buy ATI without some help.

We will have some more analysis on this later, along with the implications for all parties involved. For now though, you can share your thoughts in the forums.
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