In a press release yesterday, Advanced Micro Devices (NYSE: AMD) announced that it has agreed to buy graphics manufacturer ATI Technologies in a transaction valued at approximately $5.4 billion.
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.
This development would practically allienate ATI’s rival company, nVidia. I think if AMD can afford to buy nVidia, it would have bought it instead of ATI. Maybe Intel would follow the same route and buy nVidia, and it has enough funds to do so.
Intel was quick to respond to this news by pulling off the ATI chipset license, reports Bit Tech. That was fast! That means nVidia will be exclusive to Intel and we won’t see any nVidia cards for AMD processros as early as next year.
How will this affect the buying market? I hope with much cheaper graphics cards.
Makes great sense since all the GeForces and Radeons out there occupying the tech news are just a fraction of the video chips being sold. I am on an Intel GMA900 at the moment – part of the 915 chipset.