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AMD Announces the Acquisiton of ATI
Posted on 24-Jul-2006 21:46. | Tags Filed under: News.



AMD and ATI have plans to join forces in a transaction valued at approximately US$5.4 billion. The combination is aimed at creating a new company determined to drive growth, innovation and choice particularly in the commercial and mobile computing segments and in the rapidly-growing consumer electronics market.

AMD believes the acquisition of ATI will position the new company to deliver innovations that fulfill the increasing demand for more integrated solutions in key market segments while also continuing to develop "best-of-breed" discrete products that empower customers to choose the combination of technologies that best serves their needs.

According to the company, in 2008 and beyond, AMD aims to move beyond current technological configurations to transform processing technologies, with silicon-specific platforms that integrate microprocessors and graphics processors to address the growing need for general-purpose, media-centric, data-centric and graphic-centric performance.

Under the terms of the transaction, AMD will acquire all of the outstanding common shares of ATI for a combination of US$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, 2006.

AMD anticipates it will finance the cash portion of the transaction with a combination of cash and new debt. AMD has obtained a US$2.5 billion term loan commitment from Morgan Stanley Senior Funding, Inc. which, together with combined existing cash, cash equivalents, and short term investments balances of approximately US$3.0 billion, provides full funding for the transaction.

AMD anticipates that it will reduce operating expenses by approximately $75 million for the combined company by the end of 2007. The combined company would have achieved approximately US$7.3 billion in total consolidated sales during the last four quarters with a workforce of approximately 15,000 employees.

Headquartered in Sunnyvale, California, the company will maintain sales, design and manufacturing centers worldwide and major business centers in Silicon Valley, Austin, Texas and Markham, Ontario.

AMD's current executive team will be complemented by the addition of ATI President and CEO Dave Orton. Orton will serve as an executive vice president of the ATI business division, reporting to the AMD Office of the CEO, comprised of Chairman and CEO Hector Ruiz and President and Chief Operating Officer Dirk Meyer.




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