The French government said Tuesday it was taking motion to guard Atos, the too-big-to-fail French tech giant that manages data and cybersecurity for the country’s nuclear weapons and military programs, in addition to for the upcoming Paris Olympics, in as a result of a change in the company’s decision towards financial uncertainty.
Atos shares fell greater than 20 percent after Airbus, the European aerospace giant, said it had canceled talks to purchase Atos’ cybersecurity assets for as much as 1.8 billion euros (about $2 billion) amid a financial review. corporations. Later, Atos said it might postpone the earnings release scheduled for Wednesday “in order to evaluate strategic options.”
French Finance Minister Bruno Le Maire said the government was closely monitoring the situation and dealing on a “national solution” to guard Atos. “All French interests will be preserved,” Le Maire said, adding that he would use all means at his disposal “to guarantee the protection of strategic activities.”
Atos is not a outstanding brand amongst the world’s largest technology corporations, but in France it plays a strategic role in national security and the management of sensitive data in the civilian and military sectors. Over the last decade, it has develop into a European data and supercomputing powerhouse, operating in 69 countries, employing 95,000 people and generating annual revenues of €11 billion.
Much of that growth was based on a debt-financed spending spree in the type of acquisitions, and far of it occurred when Atos was led by Thierry Breton, former finance minister and current European Union commissioner for internal markets. The company currently has loans and bonds price €3.65 billion that have to be repaid or refinanced by the end of 2025.
In 2021, Atos’ share price fell after reports of its acquisition of US competitor DXC Technology for $10 billion. The deal was scrapped a month later as a result of investor concerns, and Atos was dealt one other blow after auditors discovered accounting errors at two of its US branches. Atos also didn’t keep pace with the development of cloud computing offered by competitors resembling Amazon and Microsoft, which further undermined investor confidence. The company has undergone three CEOs in as a few years.
IN statement on Tuesday, Atos said it was “actively assessing strategic alternatives that take into account the sovereign imperatives of the French state.” The company’s shares, which reached 75 euros three years ago, were trading at just 1.74 euros on Tuesday.
Its most dear assets were the goal last yr of a takeover bid by Daniel Kretinsky, a Czech telecommunications billionaire whose efforts were fiercely opposed by French politicians – a few of whom called for the nationalization of Atos to maintain it in French hands.
Mr. Le Maire shunned calling for nationalization. However, he said the government’s priority was to “identify solutions to stabilize the financial situation and provide the necessary visibility to stakeholders, in particular the company’s employees.”
Atos, amongst other things, owns a supercomputer that enables the French army to simulate nuclear bomb tests after the government banned physical tests in 1996. Électricité de France recently chosen Atos, Eviden, to supply control systems for six nuclear reactors that the French government plans to construct in the coming decade.
Atos software is used on French Rafale fighter jets and even on the secured telephone lines of the French armed forces. Airbus, which builds combat aircraft and military helicopters, has expressed interest in Atos’ big data and cybersecurity assets because it expands its program amid rising European defense budgets.
In a transient statement on Tuesday, Airbus said it was ending talks with Atos, but didn’t give a reason.
Atos software and computing power are also utilized by national tax and health agencies in France. The company recently won a contract to host personal data and supply cybersecurity for the Paris Olympics this summer.
