French technology consulting company Atos offered €4.3 billion, equal to $5.06 billion, to acquire Gemalto on Monday to increase its services of cyber security as big companies and states seek to fight against the increasing number of cyberattacks across the Internet worldwide.
This bid arrives as Gemalto, the largest maker of chips in credit cards and mobiles in the world, is receiving pressure after it posted four warnings about profit this year and missed an opportunity to beef up its security business via a big acquisition.
This combination would give strength to Atos in the growing Internet of Things sector of household devices and machinery that is internet connected able to collect as well as exchange data using sensors that are embedded and payment services across Europe over and above digital security, the company said.
Atos said that it gave the offer to the board of Gemalto November 28.
Shortly after the formal offer was issued, the Atos CEO Thierry Breton said he already had received the support of the biggest shareholder in Gemalto, Bpifrance, an investment bank in France that is state-owned.
Breton said he met with the big shareholders and with Bpi in particular, following the announcement of a bid for Gemalto that was unsolicited.
Bpi, said Breton, is not just in favor of this operation for European consolidation, but authorized him to go public with the information. Bpifrance has a stake of 8.51% in Gemalto.
Gemalto postponed the presentation of its new multiyear strategy until March 2018, after numerous profit warnings caused by the slowing down in demand for chips in credit cards.
Shares of the group have lost 39% in 2017 in comparison to an increase for Atos of 24%.
Since Breton became CEO of Atos during November of 2008, the company has multiplied its price of stock nearly six times, outperforming rivals in France such as Capgemini and U.S. companies IBM and Accenture.
Revenue at Atos has more than doubled during the period to over €11.7 billion in 2016, after acquiring assets from Siemens in Germany, and Xerox as well as Bull a computer company based in France.
In 2016, Gemalto sales were €3.2 billion.
The bid for all cash reflects a price of €46 per share of Gemalto, or a premium of 42% on the last closing price for the group. The bid is to be financed by existing cash at Atos and debt, said the company without elaborating any further.