Atos, the IT consulting giant, is attempting to buy Gemalto for $5 billion in cash. Positioned as a 'friendly' buyout offer, Atos says the proposed Gemalto buyout addresses opportunities in cybersecurity, homeland security, Internet of Things (IoT) and payment solutions.
Our sister site, MSSP Alert, is checking to see if the proposed deal has potential implications for managed security services providers.
Gemalto is the world’s largest maker of chips found in mobile phones and credit cards, but the company is under pressure after posting four profit warnings in a year and having missed a chance to strengthen its security business through a large acquisition, Reuters asserts.
Buyout Offer: Potential Synergies
Atos, which has about 100,000 employees in 72 countries, made a buyout offer to Gemalto's board on November 28, and has now publicly confirmed interest in the proposed takeover. According to Atos, the buyout offers three opportunities for the combined companies. They are:
- Reinforced capabilities in digital cyber technologies and services and homeland security: The combined companies cyber revenues would be about $1.7 billion. Gemalto's expertise in identity and access management, data encryption and crypto management strongly complement Atos' capabilities in Artificial Intelligence (AI), Big Data, High Performance Computers, and cloud orchestration, the suitor asserted.
- Enhanced capabilities in IoT/M2M by leveraging Atos' Codex data analytics and AI, deep industry knowledge and long-standing customer relationships, with $1.18 billion in combined revenue.
- Consolidation as a leading end-to-end European payment services provider, with revenues of about $1.18 billion from Gemalto.
In a prepared statement, Atos CEO Thierry Breton 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 and payment and has long admired its global presence and strong customer and technology portfolios. 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."
Attempting to Rally Gemalto Shareholders
Gemalto’s biggest shareholder, France’s state-owned investment bank Bpifrance, has endorsed the tos buyout offer, according to Reuters. However, as of Tuesday morning Gemalto has not publicly commented about the offer.
Atos is now maintaining a "willingness to engage into discussions with the objective to come to a transaction recommended by the Gemalto's Board of Directors," the company statement said.
Atos has been acquiring various IT services and technology assets over the past year. Example deals include:
We'll continue to track the proposed Gemalto buyout.