Dutch security technology company Gemalto has agreed to a €4.76 billion by French aerospace firm Thales SA, after it came in with an offer just shy of 11 per cent compared to last week's bid from French services company Atos.
The takeover was agreed over the weekend, with Atos deciding against raising its own offer.
Its bid of €4.3 billion was flatly turned down by Gemalto, who derided it for significantly undervaluing the company.
Although the deal is somewhat unexpected and not exactly a huge amount over and above Atos's bid last week, Thales' bid has the "unanimous support" of Gemalto's board. Atos has responded by indicating that it won't raise its offer further.
"Atos reaffirms that its offer is made with friendly intentions and is based on a solid and compelling industrial project for both companies, their employees, customers and other stakeholders," said Atos in a statement last week.
Gemalto develops a range of security products for private and government organisations. In particular, it is one of the world's largest providers of smart cards.
Thales is predominately interested in the firm's position as a leading cyber security firm, and will likely explore ways that Gemalto's solutions can be used across its aerospace business and clientbase.
Shares in the company have grown hugely since the announcement of the deal. In paris, they grew by 9.1 per cent and 6.4 per cent in Amsterdam, according to Bloomberg.
Thales said that it has already lined-up €4 billion in credit to fund the deal, and added that it doesn't have any plans to cut Gemalto's workforce once the deal is completed.
Once Gemalto's investors and regulators approve the deal, it could be completed by the second half of next year. It's the biggest European technology acquisition of 2017. Gemalto will continue to operate under its brand.
Patrice Caine, chairman and CEO of Thales, said: "The acquisition of Gemalto marks a key milestone in the implementation of Thales's strategy."
He indicated that the deal would not endanger jobs at Gemalto.
Caine continued: "Our project will be beneficial to innovation and employment, whilst respecting sovereign strategic technologies. We have a tremendous respect for Gemalto's technological achievements, and our two groups share the same culture and DNA.
"I would like to personally thank Gemalto's management and board of directors for their unanimous support and I welcome warmly Gemalto's 15,000 employees to our Group. By combining our talents, Thales and Gemalto are creating a global leader in digital security. "
Philippe Vallée, CEO of Gemalto, added: "I am convinced that the combination with Thales is the best and the most promising option for Gemalto and the most positive outcome for our company, employees, clients, shareholders and other stakeholders.
"We share the same values and Gemalto will be able to pursue its strategy, accelerate its development and deliver its digital security vision, as part of Thales."
Defence contractor Thales, formerly Thomson-CSF, is one of France's biggest companies with revenues in fiscal 2016 of €14.9 billion.
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