Monday, July 24, 2006

AMD Buys ATI

Sunnyvale-based AMD is buying graphics chip maker ATI, in a $5.4B deal, the firms said today. AMD and said that it will acquire ATI for $4.2B in cash plus 57 million shares of AMD common stock, and will finance the cash portion of the transaction with a combination of cash and debt from Morgan Stanley, which has provided the firm with a $2.5B term loan. The new firm will have $7.3M in sales for the last four quarters, and will have 15,000 employees. The companies said they will be headquartered in Sunnyvale. ATI's President and CEO Dave Orton will join the firm. If the merger does not close, ATI will pay AMD a termination fee of $162.0M.