Atos share price up after the end of its planned merger with DXC Technology

  •   03/02/2021 - 07h53
  •   DEHOUI Lionel

The Atos share made a big jump on the Paris Stock Exchange during Tuesday's trading session. As a result, the French group's share recorded the second highest performance in the CAC 40. This increase comes after the company announced that it has stopped discussions on a possible transaction with DXC Technology.

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Atos share price up sharply on the Paris Stock Exchange

At the beginning of January, Atos had shown great interest in its competitor DXC Technology. The international leader in digital transformation had approached the American group with a view to a possible transaction. Unfortunately, against all expectations, the French group's project will not be able to materialize.

The Atos Board of Directors has taken the decision (unanimously) to end the discussions with DXC Technology that have been underway for the past few days. The French group announced the information in a one-line press release. As part of the operation, it had offered its American competitor more than 10 billion euros.

This amount largely exceeds its own capitalization at the time, which amounted to 7.3 billion euros. As a result, the Atos share price had fallen by 13% at that time. However, on Tuesday, the Atos share price rose sharply by 4. 01% to EUR 68, the second highest increase in the CAC 40. This performance was mainly driven by the termination of the planned merger with DXC.

 

DXC Technology's reaction to Atos Origin's offer

Founded in 2016, DXC Technology was created from the merger of the IT services business of Hewlett Packard Enterprise and Computer Sciences Corporation. In a press release, the American said that the offer of the French specialist in the digital transformation of companies was inadequate and also lacked certainty.

This analysis of the American group was carried out by comparing the said offer with the value that the company could generate autonomously by carrying out its transformation. As a result, DXC Technology shared some high-level information with Atos. The purpose of this process is to make the French group understand the reasons why the Board of Directors believes that the proposal has undervalued DXC. After that, both groups reached a consensus to stop the discussions.

 

Read more about Atos

Founded in 1997, Atos is a French company specialized in digital services. Today, it is recognized as the international leader in digital transformation. The French group is also the European No. 1 in cloud, cybersecurity and supercomputing.

As a result, Atos reports a turnover of €11.6 billion, which is divided into three divisions. The Infrastructure & Data Management division accounts for 55% of sales. The business & platform solutions division accounts for 36%. Finally, the big data & cybersecurity division takes 9% of the company's sales.

In addition, Atos has adopted a business model based on digitizing the customer experience by leveraging industry expertise, intelligent data processing platforms & services and multiple infrastructure solution ecosystems.