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French Government in Talks to Acquire Atos’ Key Technology Assets for €500 Million

By  |  November 25, 2024

IT company Atos has initiated negotiations with the government of France for the sale of its advanced computing division, the company announced on Monday. The proposed deal, which includes critical technology assets linked to national security, is valued at an enterprise price of €500 million ($524 million).

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    According to Reuters, Atos is a key player in secure communications for France’s military and intelligence services and is renowned for its supercomputer manufacturing capabilities. The company, once a leader in the European technology sector, has faced severe financial challenges in recent years, prompting significant restructuring efforts to address its mounting debt.

    France’s government, determined to maintain control over the nation’s strategic technological resources, has been in discussions with Atos for several months to finalize an agreement. Atos has set a target to sign a share purchase agreement by May 31, aligning with the conclusion of an exclusivity period. Under the proposed terms, an initial payment of €150 million would be made upon signing, with the deal’s total potential value reaching €625 million, including earn-outs, the company revealed in a statement.

    Finance Minister Antoine Armand underscored the importance of the transaction, stating, “It is the role of the French State to guarantee, as a shareholder when it is justified, the perennity and development of the industrial activities that are most strategic for our sovereignty.”

    A Strategic Shift in Atos’ Portfolio

    The assets under negotiation—Advanced Computing, Critical Systems, and Cyber Products—are part of Atos’ cybersecurity unit, known as BDS. Collectively employing around 4,000 individuals, the division generates approximately €900 million in annual sales, according to a France Finance Ministry official cited by Reuters.

    Atos also disclosed plans to initiate a formal sale process for its Critical Systems and Cyber Products units. Analysts suggest the total sale price for these assets could surpass the initial €700 million offer.

    This transaction is seen as pivotal for Atos, whose financial health has been on shaky ground. The company’s accelerated safeguard plan is viewed as a lifeline to stave off collapse. Despite years of declining share values, Atos’ stock surged by over 160% on Monday, reaching €0.41 as of 10:47 GMT.

    Broader Implications and Future Outlook

    Earlier this month, the France’s Finance Commission adopted an amendment that could pave the way for Atos’ nationalization. The government’s intervention aligns with broader efforts to secure strategic industries critical to the country’s sovereignty.

    Related: Atos Negotiating 2 Billion-Euro Deal to Sell Tech Foundations Business

    Atos noted that the sale would not impact its refinancing strategy and expects its financial leverage in 2027 to stabilize between 1.8 and 2.1 times core earnings. The restructuring and sales processes will mark a critical juncture in Atos’ recovery and redefinition as a major technology player.

    Source: Reuters