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Reports claim a $5.6B deal is about to close on an unprecedented merger

According to a report in The Globe and Mail, the board of directors at AMD has allegedly approved the takeover of Canadian graphics firm ATI Technologies. The report claims that the information was released by an investment banker that was part of the discussions. According to other sources, AMD executives were also seen at ATI's headquarters in Markham, Ontario. The report indicated that AMD is considering a $5.6 billion takeover bid for ATI.

Speculation and rumors have run rampant over the last several months about the possible merger between AMD and ATI, but no concrete details have been revealed. According to reports on ATI's share prices, the company's shares have been trading at double the usual volume today. Analysts said that AMD would be making an offer of 20 to 40 percent premium to ATI's current share price. ATI shares traded at $16.12 on the NASDAQ today during after hours, which is up 39 cents from yesterday's closing.

Reuters has also picked up on the story, claiming that "Some analysts have questioned the rationale for an AMD-ATI merger, and others were surprised that the speculation received no attention from analysts during AMD's earnings conference call on Thursday."  DailyTech had punched in for question during the investor conference call on Thursday, but a moderator would not respond.

According to Eric Gomberg, an analyst for investment bank Thomas Weisel Partners, "there has been considerable industry speculation that AMD may pursue an acquisition of ATI Technologies, although such an outcome is by no means certain." Gomberg's comment came in earlier this week, but word circulating around investment bankers who are aware of the talks between ATI and AMD surfaced just several hours ago.

Recent reports indicated that Intel roadmaps no longer included ATI chipsets. Although Intel had been producing motherboards using ATI logic, upcoming boards like those that support Core 2 processors are void of any chipset from ATI. Interestingly, ATI and Intel had agreed to several cross-licensing programs that allowed them to take advantage of some of each other's technologies. Several analysts however, indicated that the merger between AMD and ATI to be "out of strategy for AMD and out of focus. Stupidity is no barrier to tech mergers."

A report in the Wall Street Journal confirms the talks between AMD and ATI (subscription required) today. Although the deal is not final, the report said that representatives from both companies declined to comment.

AMD has previously indicated that it would embrace embedded processor technologies for its Torrenza platform -- some of which would include math and physics co-processors.  However, the company has recently exited all non-x86 processor design.

Update 07/24/2006: AMD and ATI jointly announced the confirmation of the $5.4B merger today (July 24, 2006)

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holy sh!t
By soydios on 7/22/2006 12:54:50 AM , Rating: 2
wow...this is gonna be interesting...VERY interesting

RE: holy sh!t
By soydios on 7/22/2006 1:05:06 AM , Rating: 2
and congrats to DailyTech on being the first site to release this breaking news!

RE: holy sh!t
By soydios on 7/22/2006 1:05:38 AM , Rating: 1
that would be according to Google News
and an Edit button would be really handy for the comments...

RE: holy sh!t
By bobdelt on 7/22/2006 1:57:48 AM , Rating: 1
yeah? I've never seen an article written by google

RE: holy sh!t
By xdrol on 7/22/2006 2:34:36 PM , Rating: 2
..and clearly you have never seen Google News ever.

RE: holy sh!t
By killamajig on 7/22/2006 2:01:16 AM , Rating: 2
Well, other than the Globe and Mail, which they referenced in their article...

RE: holy sh!t
By dvinnen on 7/22/2006 2:58:25 AM , Rating: 2
Actually, looks like the inquirer had them scooped by 12 hours

But of course the inquirer is just a tabloid...

RE: holy sh!t
By wil2xl on 7/22/2006 7:18:08 AM , Rating: 2
No they didn't, look at the inq's article, it only says that the two companies are in talks and that AMD is "to ask" share holders for approval.

the dailyTech article actually talks about the confirmation.

RE: holy sh!t
By Justin Case on 7/22/2006 4:07:15 PM , Rating: 3
Actually they scooped them by almost two months. The first time the Inquirer posted about this deal was May 31st. And, as usual, every other site said they were making it up...

That is what's known as "news". After the merger is officially announced, it's just a matter of reporting.

RE: holy sh!t
By Knish on 7/22/2006 4:19:10 PM , Rating: 1
Actually they scooped them by almost two months. The first time the Inquirer posted about this deal was May 31st. And, as usual, every other site said they were making it up...

So what? Forbes scooped them. And everyone said the inquirer made it up because they have a habbit of doing so.

Didn't someone else at the inquirer also claim that this would not happen? We all know you work there by the way, you're not fooling anyone anymore.

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