France’s Atos made a major €4.3 billion play to acquire digital security provider and SIM manufacturer Gemalto, but Gemalto ultimately rejected the deal, saying it undervalued the company.
Atos’s proposed acquisition valued Gemalto at €46 per share with an all-cash offer. An official invitation to the Gemalto board of directors was issued in late November to discuss the potential deal.
The offer represented a premium of 42 percent to Gemalto’s closing price as of Dec. 8. But on Wednesday, Gemalto’s board formally rejected the bid, saying it “significantly undervalued” the company, particularly with respect to its growth in the cybersecurity space.
“We believe that Gemalto — the world leader in digital security — is best positioned to grow successfully on a standalone basis and create long term value for its stakeholders, including its shareholders,” Gemalto officials said in a letter to Atos.
In the failed takeover bid, Atos Chief Executive Thierry Breton spotlighted that Gemalto’s success in cybersecurity, Internet of Things, and payments. Atos saw its offer — which it emphasized was friendly — making the companies an end-to-end European payment services provider.
In particular, Atos highlighted Gemalto’s identity and access management products, as well as data encryption and crypto management. They were seen complementing Atos’s capabilities in artificial intelligence, big data, and cloud orchestration.
Gemalto made a number of high-profile announcements in 2017, including the launch of its Assurance Hub in June. The new risk assessment solution for online banking provides adaptive authentication, powered by machine learning and biometrics, allowing simple sign-ins when added security is not necessary, but requiring more when the situation calls for it.
And in November, Gemalto also announcd a partnership with the Center for Identity at the University of Texas (UTCID) to aid in research and education for identity management, privacy and security. Under the agreement, the two parties will focus on research in biometrics, airport security and travel, digital driver’s licenses, and identity security with mobile banking an online commerce.
Beyond its investments in identity and biometrics, the Amsterdam-based Gemalto is known as a SIM card manufacturer, providing uniquely identifiable physical cards for smartphones and other mobile devices.
Weak prospects for Gemalto’s SIM business, however, led to a $489 million goodwill impairment charge in July.