Gemalto rejects €4.3bn takeover bid from Atos

Smartcard specialist Gemalto gives the thumbs down to Atos' acquisition proposal

Smartcard and IT security company Gemalto has rejected a takeover approach from services giant Atos, claiming that the French IT services firm's bid undervalued its business.

Atos had tabled a bid of €4.3 billion for the Amsterdam-headquartered company earlier this week. But, after examining its bid proposal, has come out against the offer, claiming that it undervalued the company and that a takeover of the company would undermine its presence in a number of markets.

According to Gemalto CEO Phillippe Vallee and chairman Alex Mandl, Atos failed to take into account the work it's doing in areas such as government and security that, on the one hand, offer high growth opportunities, but on the other could be undermined by an Atos acquisition.

Vallee and Mandl added that Atos had failed to detail how they would integrate both companies, considering Gemalto's employees, shareholders and wide stakeholders.

Gemalto's bosses say that they also expected Atos to provide an analysis of the regulatory challenges that a merger between the two companies would create, although Atos failed to provide one. They described the bid as "opportunistic", coming in a year in which Gemalto had issued multiple profits warnings, which had depressed the company's share price.

Indeed, they also argued that Atos had undervalued the company.

Vallée said that regardless of the difficulties the company had experienced over the past year, Gemalto had grown significantly in recent years and that any deal should reflect this.

"In 11 years, we have turned Gemalto into a technology 'blue chip', recognised in over 180 countries throughout the world. In 11 years, the company has created 5 000 jobs," he said, adding: "Gemalto rejects unsolicited and conditional proposal by Atos."

He said that he would present shareholders with a new strategic plan to persuade them to hold on to their shares, rather than sell out to Atos.

"We will soon be presenting to our stakeholders our ambitious and substantial development plan for the company that will focus on the next generation of digital security for companies, governments and citizens worldwide," he said.

"Gemalto's employees, its board of directors, its management team and I are fully aligned and committed to achieving the success of this plan that will benefit our stakeholders, including all our shareholders."

Atos is still keen to strike a deal with the firm, though, and responded with a statement claiming that it would address Gemalto's concerns, before opening further discussions with its board of directors.

"Atos reaffirms that its offer is made with friendly intentions and is based on a solid and compelling industrial project for both companies, their employees, customers and other stakeholders," claimed the company in its statement.

It also suggested that there wouldn't be any redundancies arising from the merger, and that the Gemalto brand would be retained: "As a company, recruiting more than 10,000 employees per year, all of the 15,000 employees of Gemalto will be welcome and integrated in the enlarged group.

"Atos also confirms that it intends to integrate all of the Gemalto businesses within the combined group and will maintain the Gemalto brand."