After giving the acquisition of ATOS’s BDS (Big Data and Security) business line some thought, Airbus (stock market symbol: AIR) has chosen not to pursue talks with ATOS over this possible transaction.
The purchase negotiations for Airbus (AIR.PA), opens new tab, and Atos (ATOS.PA), a French software giant, to buy its BDS cybersecurity unit have been canceled, sending the latter’s shares plunging 18% in early trading.
The European aircraft manufacturer has shelved plans to acquire debt-ridden Atos’ assets for the second time in a year. The first time was when it turned down an offer to acquire a minority share in a larger company due to opposition from its own investors.
Atos has struggled with a string of profit warnings and is seeking to find money to deal with its debt. The company named its fourth new CEO in less than two years in January, and last month, talks over another possible sale fell through.
“Atos is analysing the resulting situation and actively evaluating strategic alternatives that will take into consideration the sovereign imperatives of the French state,” according to a statement.
“After careful consideration of all aspects of a potential acquisition” of the big data and security operations, Airbus claimed that it had made its most recent decision.
Shares of Atos dropped by about 18%. Airbus had a 1% increase.
Analyst Nicolas David of Oddo BHF stated, “The failure of this sale process poses both a liquidity problem…and a problem regarding debt restructuring.”
Housed in properties that the French government considers strategically important, Atos’s problems have caught the interest of French MPs and are being discussed in Senate hearings.
Atos’s share price has crashed over the previous two years due to a series of failures, including a poorly welcomed takeover attempt for U.S. rival DXC in 2021. Atos was formerly featured in France’s CAC 40 blue-chip index.
Though several media outlets have stated that he is exploring a second bid, the most recent failure occurs weeks after negotiations between Atos and Czech billionaire Daniel Kretinsky over the sale of Atos’ legacy operations similarly broke down.
According to a source with knowledge of the situation, Airbus withdrew from the BDS negotiations because of worries about safety and the unrest around Atos in general.
In addition to discontinuing the BDS takeover talks, Airbus refrained from adding anything to its brief announcement.
Neither the finance ministry nor One Point, the largest shareholder in Atos, responded right away.
The European aerospace behemoth is reportedly worried that if the Atos operations were taken over by a competitor like the French defense company Thales (TCFP.PA), opens new tab, its standing in the defense sector, which is becoming more and more software-focused, would be jeopardized.
Airbus has made a tentative offer to purchase BDS for 1.5 billion to 1.8 billion euros. Thales CEO Patrice Caine recently downplayed suggestions that Thales could purchase all or part of BDS, but he did not rule out any specific transaction.
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