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 (US$5.6 billion) that won the backing of the target company.
The surprise appearance of Thales outmaneuvered Atos chief executive Thierry Breton, a former French minister of finance, whose earlier offer got a lukewarm response.
Gemalto had been talking to Thales for several months, Gemalto chief executive Philippe Vallee said in an interview on local radio yesterday.
The offer for 51 euros a share comes less than a week after the 46 euros a share 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 chief executive Patrice Caine since he took over three years ago.
Atos responded by saying it would no longer pursue Gemalto, but would remain available to discuss a combination if Thales offer is not 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.
Gemalto shares yesterday climbed 6.4 percent to 49.8 euros at 8:04am 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 shares fell 2.1 percent to 125.9 euros.
Vallee, who is to stay in his post under the new owner, said his company was swayed by Thales’ 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, 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 clamoring 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 does not expect to cut Gemalto’s workforce and has secured a 4 billion euro credit facility to fund the transaction.
Thales’ dividend policy would 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.
Gemalto is to operate under its own brand name.
The new unit would have about 3.5 billion euros in revenue, representing about 20 percent of Thales’ sales.
The deal should result in savings through synergies of as much as 150 million euros by 2021, Thales said.
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