French government offers to buy Atos’ advanced computing activities

:French IT firm Atos has entered negotiations with the government over the potential acquisition of its advanced computing activities for an enterprise value of 500 million euros ($524 million), the company said on Monday.

Atos, which secures communications for the French military and secret services and manufactures servers to make supercomputers, is undergoing a restructuring to tackle its large debt. The government has for months been making a concerted effort to reach a deal to retain control over Atos’ strategic technology assets within the country.

The target is to have a share purchase agreement signed by May 31, when an exclusivity period ends, Atos said in a statement, adding that an initial payment of 150 million euros would be made when the deal was signed.

The offer could potentially be increased to 625 million euros including earn-outs, it added.

“It is the role of the French State to guarantee, as a shareholder when it is justified, the perennity and development of the industrial activities that are most strategic for our sovereignty,” French Finance minister Antoine Armand said on Monday in a separate statement.

Advanced Computing, Critical Systems and Cyber Products are part of Atos’ cybersecurity unit BDS. They employ about 4,000 people and generate about 900 million euros of annual sales, a French Finance Ministry official told Reuters in April.

Atos also said it would launch a formal sale process for BDS’s Critical Systems and Cyber Products.

Taking in to account the sale of the computing unit, Atos said it now expects its 2027 financial leverage to be between 1.8 and 2.1 times core earnings.

The parliament’s Finance Commission said earlier this month that it had adopted an amendment that could lead to the nationalisation of Atos.

($1 = 0.9544 euros)