Atos Moves To Acquire Gemalto For 4.3 Billion Euros

Gemalto is looking at an acquisition offer from French tech consultancy Atos.  The offer is for 4.3 billion euros ($5.06 billion), and the purchase would aid Atos in improving cybersecurity services.

Gemalto is the world’s largest mobile phone and credit card chip maker.  But recent months have been difficult as the firm has posted four profit warnings in a year and missed a chance at a major acquisition to shore up its core business. The group’s shares have shed 38 percent so far this year. Atos stock, by comparison, is up 24 percent in 2017.

According to Atos Chief Executive Thierry Breton, the offer already has the backing of Gemalto’s biggest shareholder, France’s state-owned investment bank Bpifrance.

“I’ve met the main shareholders and Bpi in particular,” Breton said in a call with reporters following the announcement of the unsolicited bid for Gemalto. “Bpi is not only favorable to this operation of European consolidation, but it also authorized me to tell you about it.”

Bpifrance holds 8.51 percent of Gemalto’s shares, according to the group’s last annual report.

Atos has had a strong run under Breton’s leadership since 2008 — stock value has multiplied sixish times and out performed in-nation French rival Capgemini and U.S. companies Accenture and IBM. The firm has also seen its revenue double during the same time period to 11.7 billion euros in 2016.

The all-cash bid reflects a price of 46 euros per Gemalto share,  a 42 percent premium on the group’s last closing price.  That bid will be financed by Atos’ current cash reserves and debt — though what exactly that will look like in practice has not been fully sketched out as of yet.

Breton said that two banks had already given their approval for a potential loan.

Neither Gemalto nor Bpi has had any comment on the potential deal as of yet.