Airbus is working on an offer worth up to €1.8bn for Atos’s prized big data and cyber security unit, as the French IT services company seeks to restructure and cut its debt load.
Atos announced on Wednesday that it had opened a due diligence process with the aerospace and defence company, confirming earlier reports from the Financial Times. An offer would place an enterprise value of between €1.5bn and €1.8bn on BDS, the French group’s big data and security unit, it said.
Atos’s negotiations to sell BDS mark a change in strategic direction under recently appointed chair Jean Pierre Mustier, as he works to find a solution to how the company deals with €2.25bn in debt that matures by 2025.
Atos shares rose as much as 8 per cent on Wednesday morning, but have slumped by 90 per cent in the past three years to a market value of €850mn. Standard & Poor’s downgraded the company’s credit rating in November citing increased liquidity risks.
Airbus has made no secret of its ambitions to expand its cyber activities. Airbus chief executive Guillaume Faury told the FT in November that the Toulouse-based company wanted to “grow in cyber”.
Airbus said it had submitted a non-binding proposal to buy the unit. The acquisition could “significantly accelerate” its “digital transformation . . .[and] enhance the company’s defence and security portfolio with strong capabilities in cyber, advanced computing and artificial intelligence”, it said.
The talks between Atos and Airbus for BDS are not exclusive, people familiar with the matter said. Atos said on Wednesday that it had received two expressions of interest for BDS, one of which concerned only part of the division, without disclosing the name of the other party.
French defence electronics group Thales, which has jet-fighter maker Dassault Aviation as its biggest shareholder, has been interested in BDS in the past as part of its effort to expand its cyber security business.
Thales has been considering its options in recent weeks, one person briefed on the situation said. Thales did not respond to a request for comment.
Airbus had been in talks last year to buy a minority stake in Atos’s Evidian division, which contains BDS and the French company’s cloud computing business. However, it pulled out after hedge fund manager Chris Hohn, whose fund TCI is one of the plane maker’s largest shareholders, objected to the plan.
At the time, people close to Airbus said it withdrew because it decided that buying a roughly 30 per cent stake would have been costly while not giving it much say over how Evidian was run.
Mustier’s predecessor as Atos chair, Bertrand Meunier, had resisted selling off parts of Atos to pay down debt, instead prioritising a plan to split the company into two.
He reached an agreement on selling Atos’s lossmaking legacy IT services business Tech Foundations to Czech billionaire Daniel Křetínský. The rest of Atos, using the name Evidian, would have remained listed, with Křetínský anchoring a €900mn capital raise that would have given him a 7.5 per cent stake.
However, many shareholders opposed the terms of the deal with Křetínský, arguing he was paying too little for Tech Foundations. Some politicians also objected to the idea of a foreign shareholder owning part of Evidian, which has technology that is used in France’s nuclear weapons arsenal.
Under Mustier’s leadership, Atos is now renegotiating the terms of the agreement with Křetínský.
Atos indicated on Wednesday that the renegotiations were taking longer than expected, and were not guaranteed to end in an agreement. It also said the scale of the capital raise in Evidian would be reduced as it examined the “legal and financial conditions under which [Křetínský] could be released, in whole or in part, from its commitment to participate”.
Atos chief financial officer Paul Saleh said on Wednesday that talks with Křetínský were taking “a bit longer than expected”, and centred around the price and the structure of the operation, as well as the transfer of the liabilities attached to Tech Foundations.
People close to Křetínský have said talks would focus on him not being part of the Evidian leg of the deal. “This is a discussion we are happy to have and all the players are all more or less aligned on that,” said a person close to the Czech businessman.
Atos confirmed it was in talks with its banks to refinance its debt, including through asset sales of which BDS would be a part. The company was weighing selling assets “well beyond the €400mn mentioned in the press release of July 28 2023, in order to honour its financing obligations”, it said.
It added that if the transaction with Křetínský fell through, it would consider additional sales.