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AMD to buy graphics chip maker ATI

Posted: 26 Jul 2006     Print Version  Bookmark and Share

Keywords:Advanced Micro Devices  ATI Technologies Inc.  processing powerhouse  microprocessor 

Advanced Micro Devices (AMD) and ATI Technologies Inc. have announced plans to join forces in a transaction valued at approximately Rs.24,748.20 crore ($5.4 billion). The combination will create a processing powerhouse by bringing AMD's technology leadership in microprocessors together with ATI's strengths in graphics, chipsets and consumer electronics, said the press release.

Under the terms of the transaction, AMD will acquire all of the outstanding common shares of ATI for a combination of Rs.19,248.60 crore ($4.2 billion) in cash and 5.7 crore (57 million) shares of AMD common stock, based on the number of shares of ATI common stock outstanding on July 21, 2006. All outstanding options and RSUs of ATI will be assumed. Based upon the closing price of AMD common stock on July 21, 2006 of Rs.836.86 ($18.26) a share, the consideration for each outstanding share of ATI common stock would be Rs.938.14 ($20.47), comprised of Rs.751.61 ($16.40) of cash and 0.2229 shares of AMD common stock.

AMD anticipates it will finance the cash portion of the transaction with a combination of cash and new debt. AMD has obtained a Rs.11,457.50 ($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 Rs.13,749 crore ($3 billion), provides full funding for the transaction.

The transaction is expected to be completed in the fourth quarter of 2006.

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