analysis of AMD

Today's headline aquisition of ATI by AMD highlights the significance of strong internal fundamentals for a company's performance. Here are the specifics from AMD's press release:
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Under the terms of the transaction, AMD acquired all of the outstanding common shares of ATI for a combination of approximately $4.3 billion in cash and 58 million shares of AMD common stock, based on the number of shares of ATI common stock outstanding on October 24, 2006. All outstanding options and restricted stock units (RSUs) of ATI were assumed. The value of the ATI acquisition of approximately $5.4 billion is based upon the closing stock price of AMD common stock on October 24, 2006 of $20.32 per share and excludes the value of assumed equity awards.

AMD financed the cash portion of the transaction with a combination of cash and new debt. AMD obtained a $2.5 billion term loan from Morgan Stanley Senior Funding, Inc., which, together with combined existing cash, cash equivalents, and marketable securities balances of approximately $1.8 billion, provided full funding for the transaction.
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AMD saved $290 million (over 5%) on the aquisition. Anyone who bought AMD after its crash last week should benefit. This story highlights the good things that can happen to a company when it has good fundamentals that are overlooked.