Advanced Micro Devices has announced it had completed acquisition of ATI Technologies, the world’s largest supplier of discrete graphics processors. The new company will have 15 000 employees worldwide and will be able to address the markets of microprocessors, graphics chips, core-logic sets, consumer electronics and others.

“Today marks a historic day for our employees, our partners and our customers as we officially welcome ATI into the AMD family. On day one, we are delivering a winning set of complementary technologies, igniting a new level of innovation and continuing to champion choice for the industry,” said AMD chairman and chief executive Hector Ruiz.

Under the terms of the transaction, AMD acquired all of the outstanding common shares of ATI for a combination of approximately $4.3 billion in cash and 58 million shares of AMD common stock, based on the number of shares of ATI common stock outstanding on October 24, 2006. All outstanding options and restricted stock units (RSUs) of ATI were assumed. The value of the ATI acquisition of approximately $5.4 billion is based upon the closing stock price of AMD common stock on October 24, 2006 of $20.32 per share and excludes the value of assumed equity awards.

AMD financed the cash portion of the transaction with a combination of cash and new debt. AMD obtained a $2.5 billion term loan from Morgan Stanley Senior Funding, Inc., which, together with combined existing cash, cash equivalents, and marketable securities balances of approximately $1.8 billion, provided full funding for the transaction.

“Thanks to the strength of our talented employees, the new AMD now has a full range of intellectual property (IP) in microprocessors, graphics, chipsets and consumer electronics to deliver open platforms and integrated solutions. In the near term, customers gain a new level of choice, and in the long term, we believe the possibilities for innovation are truly limitless,” Mr. Ruiz added.