Processor chipmaker AMD buys ATI

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Soldato
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I didn't know where to post this. I've been on these forums last few days and haven't seen the story, so if it's a repeat then just point me in the right direction.

BBC News said:
AMD agrees to buy ATI for $5.4bn

Advanced Micro Devices (AMD), the chipmaker that has started supplying processors for Dell computers, has agreed to buy rival ATI Technologies.

AMD wants to boost sales and close the gap between it and market leader Intel.

It will pay $5.4bn, $4.5bn (£3bn) in cash and make up the rest in equity. That values ATI shares at $20.47 each, 24% more than their close on Friday.

Despite concerns about the price of the deal, analysts said buying graphics chipmaker ATI did make sense for AMD.

"It's a brilliant strategic move," said Eric Ross, an analyst at ThinkEquity Partners.

"AMD essentially have cornered the high end graphics platform for themselves. Intel is getting squeezed out there."

In electronic trading before the open of the US stock market, AMD shares dropped 8% and ATI shares jumped 16%.

AMD said the deal would help it expand its products in the commercial, mobile computing and gaming sectors.

It also would help it expand its media and emerging market offerings.

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What does this mean for Intel?
 
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