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Court approves AMD's acquisition of ATI

Posted: 20 Oct 2006 ?? ?Print Version ?Bookmark and Share

Keywords:AMD? Intel? ATI? microprocessor? Opteron?

The Ontario Superior Court of Justice has issued the final order approving Advanced Micro Devices Inc. (AMD)'s acquisition of ATI Technologies Inc. (ATI). ATI's outstanding common shares will be acquired by an indirect wholly owned subsidiary of AMD. It is expected to be completed next week, subject to satisfaction or waiver of customary closing conditions.

"We are confident that our plans for the combination of AMD and ATI will deliver world-class customer-centric solutions and will benefit Canada and its future role in the technology industry," said AMD chairman and CEO Hector Ruiz. "We look forward to the successful completion of the transaction that will generate new opportunities for both companies, the employees and the communities in which we operate."

Initial approval
Last Oct.13, both companies announced that the Minister of Industry under the Investment Canada Act, approved the acquisition, a condition needed to close the acquisition.

To demonstrate that the transaction will benefit Canada, AMD made several commitments to the Minister of Industry with respect to its Canadian operations.

AMD committed to expand R&D in the region by increasing its employees as well as the total expenditures in its R&D sector in Canada compared to ATI's appropriation for the sector in previous years. Moreover, AMD will increase the number of student co-op positions that will be available to Canadian students at its operations in the region.

A Canadian must also be nominated for election to AMD's board of directors over the next five years, highlighting the importance that Canada will play in the ongoing operations of the combined AMD-ATI entity.

Moreover, there should be plans for a global mandate for the current ATI consumer business unit, which will continue to be based in the region. Canadian Adrian Hartog is expected to continue heading this unit.

Quarter results
On Oct. 18, AMD reported third quarter sales of $1.33 billion, operating income of $119 million and net income of $134 million, or 27 cents per share. These results include $16.5 million of employee stock-based compensation expense.

"Third quarter sales increased nine percent from the prior quarter, and 32 percent year-over-year, due to strong demand for all AMD processor brands," said Robert J. Rivet, AMD's chief financial officer. "Microprocessor unit shipments grew 18 percent sequentially as customers continued leveraging AMD's open platform approach. Demand for AMD Turion64 mobile processors was especially strong, resulting in record mobile processor sales and unit shipments coupled with increased average selling prices (ASPs). Record AMD Opteron processor sales resulted from continued adoption of dual core processors, record unit shipments and improved ASPs."

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