Atos is considering a new large-scale acquisition. Thursday, January 7, two sources familiar with the matter reported to Reuters that the French company wanted to afford DXC Technology with a proposal valuing it at more than $ 10 billion including debt (or about 8.2 billion euros). In a press release, the digital services specialist confirms having approached its American competitor.
“Create a leader in digital services”
Acts “Confirms having approached DXC Technology regarding a potential friendly transaction between the two groups to create a digital services leader with a global reach, and combining their respective talents and capacity for innovation.” The group specifies that at this stage, “there is no certainty that this approach will lead to an agreement or a transaction.”
The company does not give more details on its proposal. An operation of 8.2 billion euros would in any case represent the largest acquisition ever carried out by Atos, which achieved 12 billion euros in turnover in 2019.
Growing debt at DXC
Former subsidiary of Hewlett Packard Enterprise, DXC Technology was founded in 2017. In 2019, the American company recorded a turnover of 20.75 billion dollars (16.9 billion euros) while its debt is amounted to 7.4 billion dollars (6.03 billion euros). In 2020, sales fell to 16 billion euros while debt continued to rise to 8.1 billion euros.
In 2019, in an attempt to redress its accounts, DXC completed the sale of its health division for $ 5 billion. The company also announced on January 6 its intention to sell the Fixnetix unit which provides services to banks and investment funds. “DXC is too small to operate on its own in a low margin environment,” one of the sources told Reuters.
Discussions are still at a preliminary stage and there is no certainty that a deal will be reached, the sources said. On the Paris Bourse, the title Atos widened its losses after this information and fell by 2.3%. In New York, DXC shares soared 17% in pre-market transactions.
More weight in the United States for Atos
The transaction would allow Atos to strengthen its presence in the United States, giving it access to a wide range of customers and products, including analytics and cloud applications as well as IT outsourcing services. The acquisition would also generate synergies and savings for Atos, which has been built up through a succession of takeovers.
In 2018, the French group spent 2.8 billion euros to buy the American IT services company Syntel, which is its biggest acquisition so far. In recent months, Atos has stepped up takeover operations in sectors such as cybersecurity, artificial intelligence and digital consulting. The French group aims to increase its turnover by 5% to 7% in the medium term.
With Reuters (Pamela Barbaglia in London, with Mathieu Rosemain in Paris, Blandine Hénault for the French version, edited by Gwénaëlle Barzic)
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