Atos cybersecurity to be part of Thales?

Rumor has it that Thales could acquire Atos’ cybersecurity and digital services activities, as, according to media BFM business, it just got the support of French Economy and Finance Ministry as well as the Directorate General of Armaments (DGA), the French Government Defense procurement and technology agency. Already in February 2022, Reuters quoted the amount of EUR 2.7 billion for this acquisition. According to analysts, the government vision is to support Thales in building a world champion in cybersecurity where it would benefit from at least a good understanding and thought proximity. The government owns 25.7% of Thales. What is at stake is BDS (Big data and cybersecurity) activity, which has been developed based on the acquisition of Bull by Atos in 2014. Such a move would reinforce even more Thales leadership position in the cybersecurity sector, where it competes now with global players.

The story has already been ongoing for months, if not years, between Atos and Thales. Atos difficulties became known to the public when it issued three profit warnings in 2021-2022. Several major companies expressed their interest in acquiring some activities from Atos, including Orange, Thales, Capgemini, SopraSteria, Inetum (formerly known as GFI Informatique) and Airbus.

Atos, one of the world’s largest IT services groups, with revenues of EUR 11 billion, announced earlier this month its intention to split its activities in two publicly listed companies:

· SpinCo (Evidian): a player in the digital transformation, big data and cybersecurity markets, delivering high growth and high margins, with a EUR 0.4 billion plan to accelerate profitable growth,

· TFCo (Atos): a leader in managed infrastructure services, digital workplace and professional services, with an ambitious EUR 1.1 billion plan to drive full turnaround by 2026.

Atos adds that this would mean a complete reorganization of its activities in H2/2023, and that SpinCo, that would be renamed Evidian, would only be spun off by the end of 2023. Rodolphe Belmer, CEO of the company since early 2022 announced its departure along with this plan. As of 2021, Atos revenue reached EUR 10,839 million (down 2.5% at constant exchange rate vs. 2020) and its net losses were EUR 2,962 million. Atos share has lost around 75% of its value over a year, leading its market capitalization to be only EUR 1,428 million.

One may remember that in December 2017, when Thierry Breton was the chairman of the company, Atos announced a takeover proposal for Gemalto, just days before Gemalto and Thales revealed they had been in negotiations for months over the acquisition of Gemalto by Thales. After a couple days of overbids, the outcome became clear to all: Thales would acquire Gemalto. However, the execution took more than a year, as clearance from numerous antitrust authorities was required.

Atos has grown though a series of acquisitions over time, the latest ones, just since the beginning of 2020, being: Visual BI, a firm focusing on business intelligence in the US; cryptovision, a Germany based developer of cryptographic products and solutions for securing digital identities in September 2021; Ipsotek, a UK-based AI enhanced video analytics software provider; In Fidem, a Canada-based cybersecurity consulting firm; Paladion, a US-based provider of managed security services; and AliA Consulting in France for its energy & utilities business. Over the same period, Atos completely sold its participation in Worldline, which, in turn, acquired Ingenico.