French aerospace specialist Thales SA knocked out Atos SE’s unsolicited attempt to buy Dutch cybersecurity provider Gemalto SA, outbidding the rival with a cash offer valued at 4.76 billion euros ($5.6 billion) that won backing from the target company, reports Bloomberg.
The surprise appearance of Thales outmaneuvered Atos Chief Executive Officer Thierry Breton, a former French finance minister, whose earlier offer got a lukewarm response. Gemalto had been talking to Thales for several months, Gemalto CEO Philippe Vallee said on an interview on local radio Monday.
The offer for 51 euros a share comes less than a week after the 46-euro bid by Atos, which Gemalto rejected as “significantly” undervaluing the company. Thales received unanimous support for its overture from Gemalto’s board, gaining the upper hand with an offer 11 percent above its rival in the biggest bet yet for Thales CEO Patrice Caine since he took over three years ago. Atos responded by saying it’ll no longer pursue Gemalto, but will remain available to discuss a combination if Thales offer isn’t completed.
Both Thales and Atos were drawn by Gemalto’s security products that help protect companies and governments against data hacks and identity theft in an increasingly connected world. Thales is the bigger of the two interested companies and has a powerful shareholder in the French state, which owns about 25 percent and is also the single largest investor at Amsterdam-based Gemalto.
Shares in Gemalto climbed 6.4 percent Monday to 49.8 euros at 8:04 in Amsterdam. In Paris Thales shares rose as much as 9.2 percent to 94.25 euros, the biggest intraday rise since July 2015. Atos’s share price fell 2.1 percent to 125.9 euros.
Vallee, who will keep his post under the new owner, said his company was swayed by Thales’s financially more attractive offer, “but also the acceleration in our strategy and the overall rationale of the transaction that convinced the board.”
In an conference call on Monday, Vallee said that he does not expect any major anti-trust issues in Europe or the US.
The Gemalto transaction would be Europe’s biggest technology deal this year, highlighting how companies are clamouring for online security expertise as data breaches around the world become more prevalent. For Thales, the offer marks a major strategic expansion away from its core business, which covers areas such as avionics equipment and air-traffic management, where Thales is the global leader.
Thales said it doesn’t expect to cut Gemalto’s workforce and has secured a 4 billion-euro credit facility to fund the transaction. Thales’s dividend policy will remain unchanged, it said. The deal needs backing from investors holding at least 67 percent of Gemalto, the companies said. Thales expects to complete the acquisition, subject to regulatory approval, in the second half of next year.