Advanced Micro Devices announced today that it plans to acquire graphics chip maker ATI Technologies for $5.4 billion in cash and stock to expand its product mix and grow market share as it battles Intel for the top spot. Under terms of this deal AMD will acquire all of the outstanding common shares of ATI for $4.2 billion in cash and 57 million shares of AMD common stock. AMD will pay $20.47 for each ATI share. The company plans to finance the cash portion of the transaction with a combination of cash and some new debt. Of course, the deal is subject to the approval of ATI shareholders, FTC regulators in the United States and regulators in Canada.