The result could be lower-cost business PCs that take advantage of chips that include a CPU and graphics capabilities or, later, PCs tuned for specific jobs, such as processing data or for multimedia. It could also seed PC technologynamely x86 processing capabilityinto new types of devices for consumers as well. The deal, expected to close in the fourth quarter, will establish ATI as a business division at AMD. David Orton, ATIs CEO, will become executive vice president of the ATI business division, reporting to the AMD Office of the CEO, which includes Ruiz and Meyer. AMD will continue to maintain a facility in Markham, Ontario, where ATI is based.The deal is also subject to regulatory approval in the United States and Canada. ATI shareholders must also approve of the deal. Thus, for the time being, its business as usual. ATI will continue to deliver new products this year, Orton said. However, Orton and Meyer will head an integration team, charged with combining the two companies. AMD expects that buying ATI will be slightly accretive to its 2007 earnings. AMD also anticipates that it will reduce operating expenses by approximately $75 million for the combined company by the end of 2007 and by $125 million in 2008. Although Ruiz said he expected few layoffs would result from merging the companies. "This acquisition is about growth and creating value," he said. "I dont think the word layoffs can apply in this particular context." Editors Note: This story was updated to include information and comments from a news conference with analysts. Check out eWEEK.coms for the latest news in desktop and notebook computing.
Under the terms of the deal, 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. AMD will borrow a portion of the cash.