Atos makes $6.7B acquisition play for Gemalto

Atos makes $6.7B acquisition play for Gemalto

Atos first proposed the deal in late November, now it's going public about its acquisition ambitions


Global IT services powerhouse, Atos, has pitched a €4.3 billion (AU$6.7 billion) deal to acquire digital security provider, Gemalto, in a bid to up its cyber security and digital services play.

Atos, headquartered in France, said it first delivered a “friendly” offer to Gemalto’s board of directors on 28 November, inviting the Netherlands-based digital security provider’s directors to engage in discussions and review the potential transaction.

Now, Atos has decided to disclose its offer, saying it wanted to reiterate its “friendly intentions” – a move that could force Gemalto’s board to act on the proposed offer sooner rather than later.

“Considering increased risk that could impact Gemalto’s shares, and for the purposes of market information, the Atos’ board of directors has decided to make its proposal public while affirming its willingness to engage into discussions with the objective to come to a transaction recommended by the Gemalto’s board of directors,” Atos said in a statement.

The proposal involves a public offer for all of Gemalto’s issued and outstanding shares. It is intended as an all-cash offer of €46.0 per Gemalto share, representing a total consideration of approximately €4.3 billion.

Atos said that, strategically, its proposed acquisition and subsequent merger with Gemalto would lead to the two companies creating a combined entity with “enhanced global leadership in cybersecurity and digital technologies and services, with highly complementary offerings”.

“The proposed transaction will strengthen Gemalto’s businesses and will create a leading group in cybersecurity technologies and digital services to the benefit of all stakeholders going forward,” Atos said.

“Atos has been following closely, and with a lot of interest, the evolution of Gemalto as a leading player in digital cyber security, IoT [internet of things] and payment and has long admired its global presence and strong customer and technology portfolios,” Atos CEO and chairman, Thierry Breton, said.

“We believe that a combination of Atos and Gemalto would result in enhanced global leadership in cybersecurity, digital technologies and services and in the strengthening of our positioning as a leading European payment services provider.

“Atos has carefully considered the interest of the stakeholders of the two groups, shareholders, employees, and customers which will all benefit from the proposed friendly transaction. In addition, Atos comes forward with a long track-record of successfully integrating management teams, employees and businesses,” he said.

Atos indicated that if the deal goes ahead, it would want to retain Gemalto’s “talents” within the combined group, potentially extending to the company’s local workforce. While both companies are based in Europe, they each maintain a significant presence in Australia, with Gemalto also claiming an office in New Zealand.

“With the cooperation of Gemalto’s management, Atos is very confident in its ability to implement a smooth and successful integration of Gemalto’s employees,” Atos said.

“Atos will obviously respect all the existing employment terms of the employees of Gemalto,” it said.

Additionally, Atos said it expected key executives to remain involved and help drive the combined group’s “strong ambition”.

At the time of writing, Gemalto was yet to publicly respond to Atos’ proposal.

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