Atos in early talks to sell cybersecurity business to Airbus

BLOOMBERG

Airbus SE is weighing the purchase of Atos SE’s cybersecurity and data unit in a deal that would value the business at as much as €1.8 billion ($2 billion) including debt and help the embattled French software company raise funds.
The European planemaker is in early talks for Atos’s big data and security unit to speed up its digital transformation and enhance its defense and security portfolio, it said in a statement. The company said there’s no certainty talks will lead to an agreement. Both parties will now enter a due diligence phase.
Airbus had previously considered buying a minority stake in Atos’s Eviden cybersecurity, cloud and supercomputing businesses before aborting the process in March of last year, saying it didn’t meet the company’s objectives. The planned deal had come under fire from some shareholders, with TCI Fund’s Chris Hohn saying the purchase would represent an “extremely inefficient” use of funds.
Airbus rarely makes purchases, and has focused its resources in recent years on straightening out its production lines after the pandemic.
Atos added it had received interest from another party, without elaborating. Thales SA was also exploring an offer, the Financial Times previously reported. The French tech company, whose shares have dropped about 90% in the last three years, has been in exclusive negotiations with Czech billionaire Daniel Kretinsky’s EPEI since August 1 over the sale of its legacy Tech Foundations unit.
Atos had been in talks with EPEI before the parties started a revision of the proposal in November. The discussions center on price, the structure of the transaction and the transfer of a large proportion of Tech Foundations liabilities, with no certainty that a deal will be reached, the French company said.
The original proposal included a capital increase for Eviden, in which Kretinsky was going to provide €200 million before deteriorating market conditions required a reduction in the size initially planned. Atos and EPEI are considering the legal and financial conditions for EPEI to be released in whole or in part from its commitment to participate in the capital increase, the company said on Wednesday.
Other means the company is considering to raise cash include further asset sales, well exceeding the target set earlier of €400 million. Atos, based near Paris, faces more than €2 billion in debt repayments in the coming two years, with €500 million in bonds due in November and a €1.5 billion loan maturing in January 2025. Later next year, Atos has a further €750 million in bonds maturing.
Atos said it has started talks with its banks to secure their commitment to maintain financing, and provide refinancing where necessary. Should the company fail to reach an agreement with its banks, Atos said it won’t rule out “the use of available legal protection mechanisms to frame these discussions”.
Speaking on a call with analysts, Atos Chief Financial Officer Paul Saleh said that Atos has access to other mechanisms to facilitate and accelerate the discussions to extend the maturities should discussions stall. A company spokesman declined to provide further details on specific mechanisms.