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AMD buys ATI for $5.4 Billion

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.

Abe is the founder and Editor-in-Chief of YugaTech. You Can follow him on Twitter @abeolandres.

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6 Responses

  1. jhay says:

    I just hope it does bring video card prices down, otherwise, switching to Windows Vista would be a lot harder than first thought of.

  2. vance says:

    well any dx 9 vcards will work on windows vista, i tried using my nvidia geforcee 6600 and it just works fine…

    one good thin this might bring would be for portable computers that run on amd processor parang sa Intel integraded vga

  3. Migs says:

    yes I think it’s really to compete against the complete processor+chipset solution that Intel offers.

  4. Fleeb says:

    I think AMD+ATI would be a nice combination (ATI rules in image quality and DX — good for Vista, and OpenGL for nVidia). Maybe in response to the release of Conroe and Intel’s announcement about 4 core processors by Q4 this year.

  5. markku says:

    This will be the start of good integrated graphic chipsets for the masses! :) I read an article suggesting that AMD’s move is to position themselves comfortably next to Intel who’s currently number one in the graphics chipset market. Makes sense.

  6. Migs says:

    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.

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