Airbus, the European plane maker, is currently in discussions to purchase Atos’s cybersecurity unit. The proposed offer, including debt, values the business at up to 1.8 billion euros ($1.97 billion).
Asset-Sale Plans Revisited
Bringing fresh financial constraints, French IT group Atos is reevaluating its asset-sale plans after an unsuccessful bid by Airbus to acquire a minority stake in the Atos division that houses the cybersecurity unit.
Preliminary Discussions and Due Diligence
Atos announced on Wednesday that it is engaged in preliminary discussions with Airbus regarding the potential sale of its big-data and security business, also known as BDS. The companies will now proceed with a due diligence phase. According to Atos, Airbus’s indicative offer falls within the range of EUR1.5 billion to EUR1.8 billion.
Market Reaction
Shares of Atos rose 2.6% to EUR7.17 at 0826 GMT, experiencing an earlier surge of up to 12%. However, over the past year, the company’s shares have declined by about a third. Airbus shares, on the other hand, traded 0.4% lower at EUR140.78, but still demonstrated a 24% increase compared to a year ago.
Nonbinding Proposal from Airbus
Airbus has confirmed the submission of a nonbinding proposal for the potential acquisition of Atos’s BDS. The discussions are contingent upon a due diligence process and there is no guarantee that a transaction will occur, according to the company.
Strengthening Defense and Security Portfolio
Through the acquisition of BDS, Airbus aims to enhance its defense and security portfolio by gaining robust capabilities in cybersecurity, advanced computing, and artificial intelligence. This move aligns with the company’s aspirations within the aerospace, defense, and cybersecurity sector, which Airbus has been pursuing for a considerable time. In fact, during an earnings call in November, Airbus CEO Guillaume Faury emphasized the increasing importance of innovative defense, space, and cyber capabilities in light of recent geopolitical conflicts.
Atos Considers Asset Sales and Discusses Options with Banks
In February last year, Airbus made an offer to buy a 29.9% stake in Evidian, previously known as Atos’s Eviden business. However, the offer was withdrawn in March, with Airbus stating that it would explore other potential options with Atos.
Since then, Atos has faced increasing financial pressures and, as a result, has adjusted its strategy to ensure the repayment and refinancing of its debts. As part of this process, Atos is expanding its asset-sale program beyond the previously indicated EUR400 million in divestments, with BDS playing a significant role.
Atos has received two letters expressing nonbinding interest in BDS. However, it is important to note that one of the letters is only interested in part of the unit’s operations.
Due to changing market conditions, Atos is considering additional asset sales. This decision was prompted by the need to reduce the size of a planned capital increase for Eviden, which encompasses BDS. In October, Atos announced a capital increase of EUR900 million for Eviden, aiming to strengthen the division’s financial position.
Furthermore, Atos is currently in talks to sell its Tech Foundations division to EP Equity Investment, led by Czech billionaire Daniel Kretinsky. However, there is no certainty that an agreement will be reached.
Atos does not exclude the possibility of selling additional assets if the transaction with EPEI does not proceed as planned.
Alongside discussions regarding asset sales, Atos will also engage in talks with its banks. The objective is to secure funding and refinancing options that will eliminate uncertainties about the company’s long-term outlook.
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