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AMD and ATI merger finally announced

by Steve Kerrison on 24 July 2006, 11:36

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Red and green merge, but what does that mean for blue and (the other) green?

It's been talked about for what seems like months and months now, then last Friday we said it was actually go to happen and others said the same thing. Then, finally, AMD and ATI today came out and said they were merging.

There's been much talk about how and why this would happening, but now that AMD and ATI's PR machines can get into full swing bigging this whole merger up, what are they saying?

The word of the moment seems to be 'joining forces', but our favourite comes from the press release title: 'processing powerhouse'. The transaction, which will need shareholder approval, is valued at $5.4bn, and should close towards the end of this year, providing everything is approved and cleared:

Under the terms of the transaction, AMD will acquire all of the outstanding common shares of ATI for a combination of $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. All outstanding options and RSUs of ATI will be assumed. Based upon the closing price of AMD common stock on July 21, 2006 of $18.26 a share, the consideration for each outstanding share of ATI common stock would be $20.47, comprised of $16.40 of cash and 0.2229 shares of AMD common stock.

There seems to be a lot of emphasis on mobile and consumer electronics markets, which is indeed somewhere that a combined AMD/ATI could make a lot of progress; essentially an even growing market where is may be easier to stay ahead.

That said, desktop central and graphics processing isn't off the to-do list and the two companies seem confident that the merger will put them in a good position to roll out products that will boost the Windows Vista experience.

AMD's borrowed some $2.5bn to make this deal happen, but with both companys' boards of directors unanimously approving the deal, it seems both companys are confident that they've got what it takes to really make something of it.

There's going to be a lot of discussion about this today, tomorrow and in the weeks ahead. The analysts are going to have a field day, the bloggers are going to provide their two pence and the fanbois will be painting banners. We'll try to bring you the important and relevant stuff, rather than the useless banter, but we'll start be directing you to The Inquirer's take on today's news, if you fancy a bit of a chuckle.

HEXUS Forums :: 3 Comments

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Well its finally happened then, i dunno what to say, part of me is like woohoo ive always used ati with amd and now they will be one should mean even better compatability and performance. Although the other half of me is wondering if this is wise and if this could be detrimental to both sides :S Lets wait and see
I've seen ATI as the worse choice between the two gfx makers, maybe this will make me think different :rolleyes:
Provided ATI and Nvidia continue to compete for standalone GFX card sales I don't see this making much difference in that market, unless AMD's FAB technology gives ATI and advantage.
IMHO it will have a much bigger effect on future AMD CPUs and AMD chipsets.