AMD said the combined company would be in a position to provide integrated, tailored systems and solutions from 2008. A key element to its plans will be Windows Vista-based systems.
Under the terms of the transaction, 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. AMD said it would finance the cash portion of the transaction with a combination of cash and new debt.
The transaction is subject to regulatory approval and AMD expects it to be completed in the fourth quarter of 2006.