CORRECTED - UPDATE 2-Intel to pay AMD $1.25 bln, settle all disputes

(Corrects fifth paragraph to show analyst works at FTN Equity Capital Markets, not FTC Equity Capital Markets)

* Agree to five-year cross-licensing deal

* AMD to drop all complaints, litigation against Intel

* Dispute stretches back 12 years

* U.S. Federal Trade Commission reviewing the settlement

* AMD shares up 20 pct, Intel shares edge higher (Adds FTC statement, analyst and executive comment)

By David Lawsky

SAN FRANCISCO, Nov 12 (Reuters) - Intel Corp (INTC.O) will pay rival chipmaker Advanced Micro Devices Inc (AMD.N) $1.25 billion to settle all outstanding legal disputes, in a move that could weaken antitrust authorities' cases against Intel.

Shares of AMD jumped 20 percent on Thursday on news of the payment, which analysts expect the loss-making chipmaker to use to pay down some of its $3.2 billion of debt. Intel shares edged higher.

The settlement ends a global campaign that AMD has been waging against its larger rival that stretches back 12 years.

Regulators in Asia, Europe and the United States have taken action against Intel because of complaints by AMD that its business is being damaged by alleged anti-competitive behavior. Intel, the world's top chip company, makes 80 percent of the central processing units at the heart of personal computers.

Joanne Feeney of FTN Equity Capital Markets said the deal could stave off the U.S. Federal Trade Commission's pending decision to take action against Intel.

"It eliminates a large amount of uncertainty for both companies. $1.2 billion is a lot of money and I believe AMD will use it to accelerate their debt payment," she said.

FTC Chairman Jon Leibowitz said the commission will review the settlement.

"Certainly we plan to review the settlement between Intel and AMD in their private litigation. The FTC has an ongoing independent investigation of Intel's practices so we cannot comment further at this time," Leibowitz said in a statement.

GLOBAL SETTLEMENT