Gemalto wooed by Thales' massive wallet

Marco Green
December 18, 2017

Gemalto's board of directors has backed a €4.76 billion (£4.2bn) cash buyout offer from French aerospace firm Thales, a week after a previous bid for the Dutch security technology company by outsourcing giant Atos met with a lukewarm response.

Gemalto is the world's largest producer of SIM cards which account for a third of its business.

Caine later told a news conference that Gemalto's staff would have the opportunity to get jobs at Naval Group, part of Thales. Both the Thales and Gemalto management teams share a common industrial vision and endorse the growth project of this newly created digital security global business. Gemalto has rejected Atos' $5.06bn bid, in a move to boost Atos' technology consulting firm's cybersecurity expertise - including Gemalto's SIM and credit card chip business.

Thales will combine its digital businesses into Gemalto, which will continue to operate under its own brand as one of the seven Thales global business units.

Atos said it would no longer pursue a deal with Gemalto but would remain available for talks if the Thales bid doesn't come to fruition.

Thales shares surged 7.81 percent to 93 euros at 0952 GMT, while Amsterdam-listed Gemalto's shares were up 5.47 percent at 49.38 euros, just below Thales' 51 euro per share basic offer. Altogether, the new business unit will represent about 20 percent of pro forma group revenues and rank among the top three players worldwide, with Euro 3.5 billion revenues in the fast growing digital security market.

Christophe Castaner, a junior minister in the French government and head of the party of French President Emmanuel Macron, told France 3 television the deal was "in the right direction".

Bpifrance said this week it was favorable to consolidation between two French companies in the tech sector.

The aim is to create a "world leader in digital technology" with sales of €3.5 billion. Run-rate pre-tax cost synergies are expected at Euro 100-150 million by 2024, as well as "meaningful" revenue synergies.

The deal, expected to close in the second half of 2018, would have a positive effect on earnings per share of 15-20 percent, before synergies, from the first year, they said.

Other reports by Click Lancashire

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