AMD to buy ATI?

Don't know if someone else posted this already:

AMD Nears Deal to Buy ATI Technologies - By DON CLARK - July 21, 2006 8:52 p.m.

SAN FRANCISCO -- Advanced Micro Devices Inc. is close to an agreement to buy ATI Technologies Inc., people familiar with the matter said. Terms could not immediately be determined. ATI, an Markham, Ontario, company that is best-known for graphics chips, currently has a market value of about $4.2 billion.

Spokesmen for the two companies declined comment.

The long-rumored deal, if completed, would open a new front in AMD's struggle with Intel Corp., its nemesis in the market for microprocessors. Besides offering those chips, which act as the brains of personal computers, Intel offers companion products known as chip sets that carry out other important functions in PCs. That is an important advantage in fields such as laptop computers, where Intel is able to use the combination of products to bring benefits such as reduced power consumption.

ATI, though best known for add-in graphics cards it sells in competition with Nvidia Corp., is also a major seller of chip sets, particularly for laptops. Like Intel, ATI offers built-in graphics along with chip sets. Those capabilities could help AMD offer a complete "platform" of technologies for laptops and are the main reason AMD is interested in ATI, one person familiar with the situation said.

The transaction is considered controversial, however. That's partly because AMD has generally enjoyed benefits from being a neutral partner for both ATI and Nvidia, particularly in supplying components for the high-performance PCs favored by game enthusiasts.

Several news outlets carried reports of a potential deal Friday, including the Inquirer Web site, the Globe and Mail and Bloomberg. ATI shares rose 83 cents, or 5.3%, to $16.56 at 4 p.m. on Nasdaq. Shares of AMD, which reported financial results late Thursday, traded at $18.26--off $3.39, or 15.6%--on the New York Stock Exchange.

 

Old news and it was false.

 

Really TV? A lot of investors believe that a deal is pending and an announcement could arrive as early as Monday.

 

from what ive heard and seen its just a big rumor atm.

 

No guys it isnt a rumor. AMD is going to buy ATI:

Source: http://uk.theinquirer.net/?article=33185

I hope this will be published as news.

Charlie

 

You mean AMD is going to buy ATI, not Intel.

 

It's in the news everywhere. The story resurfaced yesterday. I think that the buy off would benefit us consumers, as AMD machines with ATI graphics cards would become cheaper.

 

This is going to be interesting then....

 

I really hope this falls through. love and exclusivley use ati grfx, and now with intel back on top of the cpu market it will hurt my future plans. oh well business as usual

 

I've been quite neutral when it comes to GPU's and when it comes to CPU's I've used mostly AMD's.

With their loss of the best processor title buying ATI could either help or hurt them. We'll see what the future brings. I do fear this would force Intel to buy Nvidia though....

 

I didn't read the news articles, but im not so sure if this will completely benefit us consumers. Assuming the merger goes through, what if AMD says that AMD chips must be packaged together with ATi GPUs? Somewhat like the Centrino program from Intel. What happens to those who prefer NVidia with their AMD CPU? That flexibility may be lost...

 

Yet another large worry of mine.

 

I can't see AMD taking away the consumer's option of GPU. I expect there will be more AMD/ATI bundles available and incentive to go that way, but it would be a major marketing blunder to make AMD & Nvidia incompatable. I seriously don't see that happening.

 

From the WSJ - 2 articles:

Advanced Micro Plans 'Significant' Announcement Monday
DOW JONES NEWSWIRES -July 23, 2006 9:59 p.m.

Advanced Micro Devices (AMD) said it will make a "significant" announcemet Monday in a conference call beginning at 8 a.m. EDT, amid reports the Sunnyvale, Calif., company is close to an agreement to buy ATI Technologies Inc. (ATYT, ATY.T).

The Wall Street Journal, citing people familiar with the matter, has reported integrated-circuit supplier AMD plans to offer about $5.4 billion in cash and stock for ATI, a Markham, Ontario, company that is best known for graphics chips. ATI's market capitalization Friday was about $4.2 billion.

AMD Will Pay $5.4 Billion To Purchase ATI Technologies - By DON CLARK and DENNIS BERMAN -July 23, 2006 4:16 p.m.

SAN FRANCISCO -- Advanced Micro Devices Inc. plans to pay about $5.4 billion to buy ATI Technologies Inc., people familiar with the matter said, in what would be one of the biggest-ever acquisitions of a semiconductor maker.

The companies were in late stages of negotiations Sunday, with a deal likely to be announced as early as Monday morning, these people said. ATI had a market capitalization of about $4.2 billion as of Friday. The consideration from AMD is expected to be mostly in cash, with the remainder comprised of AMD shares, these people said.

The long-rumored deal, if completed, could transform AMD's long-running battle with Intel Corp., the No. 1 supplier of the microprocessors that serve as electronic brains in personal computers. ATI, based in Markham, Ontario, is best known for another category of chips that handle PC graphics, a market where it competes fiercely with Nvidia Corp.

Significantly, ATI also makes another category of accessory products called chip sets, which carry out functions such as fetching data from memory and sometimes come with built-in graphics. Intel has an even bigger business in chip sets, and has used that capability effectively against AMD.

Intel's strategy has been particularly potent in laptop computers, where the company has used the combination of microprocessors and chip sets to offer such benefits as lower power consumption. AMD, with ATI's help, could match and possibly surpass Intel's ability to offer computer makers such integrated "platforms" of technology, said Jon Peddie, a market researcher in Tiburon, Calif.

Rahul Sood, president of the gaming computer company VoodooPC, argued in a blog over the weekend that ATI is a "diamond hidden deep in the rough." The proposed deal would be a brilliant stroke for AMD, he argued, representing "a go-big strategy that will shake the very foundation of our industry."

The transaction is considered controversial, however. That's partly because AMD has generally enjoyed benefits from being a neutral partner for both ATI and Nvidia, particularly in the market for high-performance PCs favored by game enthusiasts.

AMD needs Nvidia's continued support in selling chip sets and graphics chip that exploit AMD's microprocessors, and so would have to be even-handed in sharing information with Nvidia as well as an ATI subsidiary.

Another possible concern is ATI's track record. The company last year ran into delays in launching its latest high-performance graphics chip, allowing Nvidia to boost its market share. In late June, ATI issued a sales forecast that fell short of analysts' expectations, triggering a sharp drop in its stock price.

AMD also has been separately spending heavily on boosting its manufacturing capacity. The company, which had about $2.5 billion in cash and short-term investments at the end of June, would likely have to take on debt to finance the ATI transaction, further stretching its financial resources at a time when its share price has been under pressure because of competition from Intel.

AMD, of Sunnyvale, Calif., on Thursday reported a 53% jump in second-quarter revenue, but acknowledged that sales would have been even higher if pricing pressure from Intel had not been so severe. In response, the company's stock sunk 15.6% Friday to trade at 4 p.m at $18.26, off $3.39, on the New York Stock Exchange.

Several news outlets carried reports of a potential deal between AMD and ATI Friday, including the Inquirer -- a Web trade publication -- the Toronto Globe and Mail and Bloomberg. ATI shares rose 83 cents, or 5.3%, to $16.56 at 4 p.m. on Nasdaq.

 

Guess you were wrong and they were true this time around