AMD To Buy ATI

To me this is a big time bummer. they could set it so it will work 100% with AMD chips and have minor problems with Intel chips.
This reduces the market to one major independent video card manufacturer.
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AMD Agrees To Buy ATI For About $5.4 Billion

http://www.techweb.com/showArticle.jhtml?articleID=191000175



NEW YORK, July 24 - Advanced Micro Devices Inc, the No. 2 supplier of computer processors, said on Monday it would acquire graphics chip maker ATI Technologies Inc. for $5.4 billion in cash and stock to expand its product mix and grow market share as it battles Intel Corp..

Under terms of the deal, AMD will acquire all of the outstanding common shares of ATI for $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.

AMD said it would pay $20.47 for each ATI share. That marks a 24 percent premium over ATI's closing stock price of $16.56 on Nasdaq on Friday. The stock added another 7 percent to $17.68 in after-hours trading amid media reports of the expected deal.

The consideration for each outstanding share of ATI comprises $16.40 in cash and 0.2229 shares of AMD common stock, the companies said.

AMD, the No. 2 supplier of computer processors, said it expects to finance the cash portion of the transaction with a combination of cash and new debt.

AMD has obtained a $2.5 billion term loan commitment from Morgan Stanley Senior Funding which, together with combined existing cash, cash equivalents, and short-term investment balances of about $3 billion, provides full funding for deal, it said.

ATI said it has agreed to a termination fee of $162 million. The deal is subject to the approval of ATI shareholders and regulators in the United States and Canada.

Talk of a tie-up between the two companies first emerged in May, but many industry analysts have said it made little financial or strategic sense for AMD to buy ATI outright.

In addition to making graphics chips, ATI also supplies chipsets -- the cluster of secondary chips and interfaces that surround a computer's processor -- for AMD and Intel products.

It doesnt bother me cause i've always bought AMD and ATI, and with them together now who knows what they can do. I doubt that they will make it so it wont work with intel, cause it would probably reduce sales.