Advanced Micro Devices (AMD) announced Monday it will buy Canadian graphics chipmaker ATI Technologies for $5.4 billion, in what analysts called an aggressive and expensive move to compete with Intel Corporation. The deal will give AMD, the world's second-largest supplier of computer processors, better high-end graphics products for mobile computing, gaming, and media markets, putting pressure on its larger rival Intel. Under the deal, AMD will pay $4.2 billion in cash and 57 million shares of AMD common stock. AMD will assume $2.5 billion in new debt to complete the deal. Since rumors of a deal first emerged in May, many industry analysts have voiced skepticism, saying it made little financial or strategic sense for AMD to buy ATI. While there are potential savings from the acquisition, it also increases the risk facing AMD, which is in a bitter price war with Intel.
