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Atos proposes to acquire Gemalto to create a global leader in cybersecurity, digital technologies and services

Atos. a global leader in digital transformation, announces that it has made a formal proposal to acquire Gemalto by way of a public offer for all of Gemalto issued and outstanding shares

2017-12-18 10:38:23

Atos invited Gemalto's Board of Directors to engage discussions and review collaboratively this potential transaction. On November 28, 2017, Atos has delivered an offer to the Board of Directors of Gemalto which is friendly, compelling, and which addresses the interests of all stakeholders. Since then, Atos has reiterated its friendly intentions. Considering increased risk that could impact Gemalto's shares, and for the purposes of market information, the Atos' Board of Directors has decided to make its proposal public while affirming its willingness to engage into discussions with the objective to come to a transaction recommended by the Gemalto's Board of Directors.

Key terms of the Atos proposal:
• Intended all-cash offer of €46.0 per Gemalto share (cum dividend), representing a total consideration of approximately €4.3bn.
• A premium of c. 42% to Gemalto's last unaffected closing price as of December 8, 2017, and c. 42% and c. 34% premium to Gemalto's 1-month and 3-month volume weighted average trading prices, respectively.
• The proposed transaction will strengthen Gemalto's businesses and will create a leading Group in cybersecurity technologies and digital services to the benefit of all stakeholders going forward.
• The acquisition of Gemalto shares will be entirely financed with Atos' existing cash resources and fully committed external debt.

Thierry Breton, Chairman and CEO of Atos said: "Atos has been following closely, and with a lot of interest, the evolution of Gemalto as a leading player in digital cyber security, IoT and payment and has long admired its global presence and strong customer and technology portfolios. We believe that a combination of Atos and Gemalto would result in enhanced global leadership in cybersecurity, digital technologies and services and in the strengthening of our positioning as a leading European payment services provider. Atos has carefully considered the interest of the stakeholders of the two groups, shareholders, employees, and customers which will all benefit from the proposed friendly transaction. In addition, Atos comes forward with a long track-record of successfully integrating management teams, employees and businesses"

A powerful industrial combination in three high-growth markets

Strategically, the combination of Atos and Gemalto will lead to enhanced global leadership in cybersecurity and digital technologies and services, with highly complementary offerings, technologies, and commercial footprint:
• Reinforced capabilities in digital cyber technologies and services and homeland security: the combination will lead to the creation of a worldwide leader with total revenue amounting to
€1.5bn. Gemalto's offerings in identity and access management, data encryption and crypto management strongly complement Atos' capabilities in Artificial Intelligence (AI), Big Data, High Performance Computers, and cloud orchestration.
• Enhanced capabilities in IoT/M2M by leveraging Atos' Codex data analytics and AI, deep industry knowledge and long-standing customer relationships, with c. €1bn in combined revenue.
• Consolidation of the Group position as a leading end-to-end European payment services provider: as a global leader with approximately €1bn in revenues in 2016, Gemalto has gained unique and deep expertise in payment solutions. The synergies between Worldline, Gemalto, and Atos businesses will benefit from end-to-end capabilities across the value chain and many substantial geographic, technology and services complementarities.

The combination will reinforce the two groups in Europe as well as in the United States of America, first market for the two companies and where the new group will be a key player in term of investments and jobs creation.

Strong fit in the interest of both Atos and Gemalto stakeholders

Atos and Gemalto have long shared a common DNA, which is expected to serve as a strong foundation for bringing the two companies together. Both groups have a long-standing heritage of technological and scientific excellence. Both are client-centric organizations, relentlessly focusing on customer needs and satisfaction. Atos and Gemalto both put enormous emphasis on attracting, developing and retaining the very best talent, in an increasingly competitive and global environment. Finally, Atos and Gemalto share a long-standing experience in cybersecurity for its clients in both private and public sectors.
Atos has demonstrated in the past its integration capabilities, in particular with the successful integration of the 33,000 employees of the Siemens Information Systems, the 9,300 employees of Bull and the 9,600 employees of Xerox ITO, transactions which have been beneficial to all stakeholders involved. The integration methodology of Atos will notably entail – with due respect to the social dialogue framework of both companies – to:
• Immediately and fully mobilize the employee base of the two groups in order to sustain the continuity of operations and develop a shared strategic vision in key markets that Gemalto is operating in;
• Welcome Gemalto's employees as soon as the proposed transaction is completed and foster a joint culture of technological and scientific excellence, teamwork, and shared pride in being part of a strengthened global group ideally positioned to face future market challenges;
• Open up new opportunities for Gemalto's employees by allowing them to participate fully in the various programs of the Atos Group.

It is key for Atos to retain Gemalto's talents within the combined group. With the cooperation of Gemalto's management, Atos is very confident in its ability to implement a smooth and successful integration of Gemalto's employees. By way of background, Atos hires more than 10,000 engineers annually, and has obtained multiple awards as a great place to work across countries. Atos will obviously respect all the existing employment terms of the employees of Gemalto.

Regarding Gemalto's clients, Atos believes the combination will greatly enhance the breadth and depth of existing commercial relationships. Clients will obviously benefit from continued and relentless focus on their needs, but also from a broader set of capabilities contributed by Atos (e.g. holistic approach in digital security, deep industry expertise in IoT/M2M, positioning across the full payments value chain, new technology expertise in AI, Big Data, High Performance Computing, cloud orchestration) but also from the increased scale and stability of the combined group.

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