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### Airbus in Talks for €1.8 Billion Deal with Atos Security Firm BDS

As it continues to battle high debts, Atos could flog its prized security business to Airbus, and d…

In a deal potentially valued at up to €1.8 billion, Airbus and Atos have initiated preliminary discussions regarding the acquisition of the cybersecurity division of French tech behemoth BDS. This acquisition would offer Atos a much-needed financial boost as the company navigates a substantial restructuring effort and aims to manage escalating debt levels.

Confirmation of the discussions between the two companies was announced on Wednesday night. Atos also revealed that the proposed acquisition of its Tech Foundations division by private equity fund EPEI for €400 million, announced five months ago, is still pending finalization. In the event that EPEI acquires Tech Foundations, it is unlikely to invest in Eviden, another subsidiary of Atos.

Atos, recognized in France as a company of strategic national importance, holds significant public sector contracts and serves as a key IT provider to the British government and other clients in both public and private sectors. However, its revenue has recently declined as businesses transition to alternative IT service providers.

Airbus is contemplating the acquisition of Pkk from Atos.

BDS, Atos’ cybersecurity arm, is currently housed within Eviden, a subsidiary formed following Atos’ merger with Tech Foundations. While the former manages identity contracts for on-premises IT infrastructure, the latter oversees data management, cybersecurity, and protective solutions.

Despite viewing Eviden as a substantial growth opportunity, Atos has faced challenges in maintaining financial stability. Recent statements confirm ongoing discussions with Airbus and another undisclosed entity regarding the future of BDS. Concerns have been raised about the need to divest additional assets to meet upcoming debt obligations, including a €1.5 billion loan due in January 2025.

The potential sale of BDS is considered a critical decision by Atos’ board, aiming to safeguard the interests of its core operations. Atos has received non-binding expressions of interest from two parties, with one specifically targeting a portion of the BDS division.

Atos has announced the commencement of due diligence with Airbus, following the latter’s indicative offer valuing BDS between €1.5 billion and €1.8 billion. Meanwhile, discussions with Airbus about acquiring a 30% stake in Eviden last month did not progress.

Regarding the sale of Tech Foundations to EPEI, negotiations are ongoing, focusing on pricing, transaction structure, and the transfer of substantial obligations. Atos emphasized that the outcome of these discussions remains uncertain. Plans for an EPEI investment in Eviden, intended to bolster the company’s financial position with a €900 million injection, may be reconsidered due to evolving market conditions.

If both transactions are finalized, Atos could streamline its service portfolio to drive revenue growth. The company reported a slight revenue decline to €5.54 billion in the first half of the 2023 fiscal year, compared to €5.56 billion in the same period in 2022. Operating losses increased from €294 million to €434 million due in part to restructuring costs.

Atos has undergone leadership changes, appointing Yves Bernaert as the new CEO in October and witnessing the resignation of Bertrand Meunier, the proponent of the Tech Foundations sale, in favor of Jean Pierre Mustier.

The company remains cautious about further asset sales, particularly if the deal with EPEI falls through, as indicated in the latest update.

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Last modified: January 15, 2024
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