Distie hails Atos' bid for rival Gemalto as 'tremendous opportunity for the channel'

A bid by French IT services firm Atos to snap up security specialist Gemalto has been praised as 'tremendous for the channel' by its UK distributor

IT services giant Atos has made an unsolicited bid to snap up rival Dutch security vendor Gemalto, in a deal worth €4.3bn (£3.78bn).

The French behemoth is one of Europe's biggest channel names, claiming annual revenues of €12bn (£10.5bn), while Amsterdam-based Gemalto is the world's largest manufacturer of SIM cards.

Gemalto's board said it had set a Friday deadline to review the all-cash bid. Atos CEO Thierry Breton called his offer "a friendly transaction".

"We believe that a combination of Atos and Gemalto would result in enhanced global leadership in cybersecurity, digital technologies and services and in the strengthening of our positioning as a leading European payment services provider," he said.

"In addition, Atos comes forward with a long track record of successfully integrating management teams, employees and businesses."

Commenting on the news, Exclusive Networks COO Barrie Desmond - Gemalto's sole distributor in the UK and the Nordics - praised the bid as "good news all round".

"I am surprised who's trying to acquire them but I think it's a tremendous opportunity for the channel to have a brand name like Atos owning that technology. Encryption is growing like you wouldn't believe it and so is authentication, so this deal would I think help increase Gemalto's awareness," Desmond said.

"It really is fantastic news for the channel because I think there's a real opportunity for us to make more money, especially in the longer term."

To bolster its bid, Atos also claims that French government-backed investment fund BPI - Gemalto's largest shareholder - which holds an 8.3 per cent stake in Gemalto, supports the deal.

Gemalto originated 11 years ago via the merger of rival smartcard manufacturers Axalto and Gemplus. The firm, which turned over €3.12bn in 2015, also offers a range of security tokens, payment systems software, encryption and managed services.

However, it has since struggled due to being hit by the falling demand for new smartphones: SIM cards account for about a third of revenues.

In July, Gemalto shares fell 20 per cent to €44, their lowest level in more than five years, sliding further to €34 last week.

Upon the news breaking of the Atos bid, Gemalto's share shot up 33.5 per cent to as high as €45.90 at market opening in Amsterdam this morning.

Breton further appealed to Gemalto shareholders by adding:

"We are totally determined and we will do the deal. We believe it makes great sense for the Gemalto shareholders and has strong industrial logic."