The tie-up is expected to go through in the second half of 2018.
Gemalto has accepted a $5.6bn offer from French electronics firm Thales just days after it rebuffed a lower offer from Atos. Thales won over Gemalto with an all-cash offer of €51 per share cum dividend, at a premium of 57% over the closing price as of 8 December 2017.
Gemalto CEO Philippe Vallée announced the takeover as “the best and most promising option” for the world’s largest SIM card manufacturer.
Last Thursday, Gemalto rejected a €4.3bn ($5.06bn) bid from cloud computing giant Atos which Vallée said “substantially undervalued” the digital security company.
The deal will involve all 15,000 of the Gemalto’s employees moving over to Thales and adding €3bn revenue to the French weapons manufacturer.
Thales said it will finance the offer through “its available cash resources and through new debt arrangements”. The firm said it has already secured a €4.0 billion fully committed credit agreement.
Vallée said: “I am convinced that the combination with Thales is the best and the most promising option for Gemalto and the most positive outcome for our Company, employees, clients, shareholders and other stakeholders. We share the same values and Gemalto will be able to pursue its strategy, accelerate its development and deliver its digital security vision, as part of Thales.”
“The Gemalto Board has decided to unanimously support the transaction and recommend that Gemalto’s shareholders accept the offer and vote in favour of the resolutions relating to the offer at the upcoming Extraordinary General Meeting,” said the Dutch-based SIM maker in a press release.
Together, the firms will produce IoT equipment, sensors and real-time decision-making technologies. Vallée will lead the combined digital security business, with a portfolio including security software, biometrics and multifactor authentication as well as the issuance of secure digital and physical credentials.
Thales CEO Patrice Caine said: “The acquisition of Gemalto marks a key milestone in the implementation of Thales’s strategy. Together with Gemalto’s management, we have big ambitions based on a shared vision of the digital transformation of our industries and customers. Our project will be beneficial to innovation and employment, whilst respecting sovereign strategic technologies.”
The junior security software firm shed 288 of its French staff at the beginning of December, representing 10% of its workforce in the country, according to Le Monde. The firm suffered a blow to its reputation in late October when millions of its smartcard chips used in bank cards were found to be vulnerable to a cryptographic attack.
“Atos wishes Thales, Gemalto and its employees full success for their project,” said the rival bidder in a press release. “Should, for any reason, Thales’ conditional offer not be completed, Atos shall remain available to discuss a combination with Gemalto.”
The tie-up is expected to go through in the second half of 2018, Thales said.