European aerospace conglomerate Airbus has cancelled plans to amass French IT providers firm Atos’ Big Data and Security (BDS) enterprise simply weeks after opening negotiations for a possible buy.
Neither firm supplied any rationalization for the sudden improvement. Instead, in short statements, each Atos and Airbus disclosed that discussions on the sale had ended.
Shares Plunge
“After cautious consideration of all facets of a possible acquisition of ATOS’ BDS (Big Data and Security) enterprise line, Airbus has determined it can no longer pursue discussions with ATOS about this potential transaction,” Airbus mentioned.
Atos mentioned it was nonetheless analyzing the implications of Airbus’ resolution and evaluating different choices that align with “the sovereign imperatives of the French state.”
News of Airbus strolling away from the deal — valued between $1.65 billion to $2 billion — despatched shares of the troubled Atos spiraling downward on March 19 by 25% at one level. Since Jan. 2, the corporate’s shares have fallen over 70% from €6.99 ($7.59 USD at present alternate charges) to €1.74 (round $1.89 USD) at shut of buying and selling March 19. The crumbling deal additionally pressured Atos to reschedule its 2023 earnings launch to the “close to future” whereas the corporate evaluated “strategic choices.”
The $12 billion Atos’ BDS enterprise delivers a spread of cybersecurity, massive knowledge analytics, synthetic intelligence, and supercomputing capabilities. The firm has shut ties to the French authorities and army and has a contract to handle cybersecurity at this summer season’s Olympics in Paris. When information first surfaced of Airbus’ plans to amass Atos BDS, the aviation builder described the transfer as one thing that would considerably speed up its digital transformation initiatives and bolster Airbus’s capabilities in cybersecurity and AI.
Politically Motivated?
But some have been skeptical of the worth that Atos would deliver to Airbus. They have reportedly raised questions on whether or not the sale was politically impressed to make sure that Atos — with all its connections to the French authorities — would not land within the lap of a international purchaser. A Reuters report on March 19 quoted an funding banking analyst as saying the deal would have been a “unfavorable for Airbus, given issues that this is likely to be a political deal, and its unfavorable impression on buyback potential.” In a report, Morningstar described some French lawmakers as in search of to nationalize the BDS group to forestall a takeover by a international purchaser.
This is the second time that Airbus has backed off from shopping for a stake in Atos’ cybersecurity enterprise. In 2022, the European aerospace large introduced plans to amass a 29.3% minority stake in Atos’ Evidian cybersecurity enterprise, of which BDS is part.
At the time, an enthusiastic Atos described Airbus’ curiosity in changing into an “anchor shareholder” as a partnership that may speed up Evidian’s progress whereas “making certain technological sovereignty in France and in Europe,” in cybersecurity, cloud, and different superior computing capabilities.
However, a 12 months later in March 2023, Airbus, in a quick assertion just like the one it issued this week, known as off the Evidian funding saying it didn’t align with the corporate’s objectives. Then, as now, there was opposition to Airbus’ deliberate funding on the identical grounds. One of them, TCI Fund Management, a 3% stakeholder in Airbus, known as the proposed deal on the time as “worth harmful” for Airbus. TCI Fund additionally expressed concern that the funding was a minimum of partially politically motivated.
Regardless of the explanations for the deal’s collapse, Atos’ BDS group would have introduced capabilities to Airbus that many see as vital to handle skyrocketing cyber threats within the aviation and aerospace sectors. A latest report by Resecurity highlighted a number of cases the place main gamers within the sector, corresponding to Boeing and Airbus, grew to become victims of ransomware assaults and knowledge leaks and different incidents the place risk actors focused main airports worldwide in cyberattacks.