AMD buys ATI

By agencies   |   Monday, 24 July 2006, 07:00 Hrs
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BANGALORE: The worldÂ’s second biggest computer chip maker, AMD today said it would acquire graphics card maker ATI Technologies Inc for $5.4 billion, mostly in cash.

Ontario, Canada-based ATI, which makes chipsets and graphics chips for computers, also makes chips for consumer products such high definition TVs and cell phones.

Around 80 percent of the deal consideration will be in cash and the rest in AMD stock. The transaction is expected to close in Q4 2006.

In the event that the transaction does not close, ATI has agreed to pay AMD a termination fee of $162.0 million under circumstances specified in the acquisition agreement.

AMD expects that the transaction will be slightly accretive to earnings in 2007, and meaningfully accretive in 2008, before the inclusion of ATI acquisition–related charges, based upon AMD's plans to deliver more integrated and advanced platform solutions and thereby improve its position in commercial clients, mobile computing, gaming, media and emerging markets.

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