Gemalto soon will have a new owner. The digital security services provider says it has reached an acquisition agreement with France-based aerospace and defense group Thales in a deal worth approximately $5.5 billion.
The deal, which followed Gemalto’s rejection of an acquisition offer from France-based information technology company Atos, will create a digital services behemoth. Thales said it plans to combine its own digital services under the Gemalto brand, and operate it as one of Thales’ seven global business units.
Gemalto is well advanced in its transition from its historical markets to the fast-growing government, enterprise security, and industrial Internet of Things markets
The deal comes amid a major digital technology push from Thales, which in the last three years has invested more than $1.1 billion to beef up its prowess in such areas as cybersecurity, artificial intelligence and data analytics. “The integration of Gemalto strongly accelerates this strategy, reinforcing Thales’s digital offering, across its five vertical markets—aeronautics, space, ground transportation, defense and security,” Thales said. “The combination creates a powerhouse with a solution portfolio including security software, expertise in biometrics and multifactor authentication and the issuance of secure digital and physical credentials.”
The deal also gives Thales the wide expertise built up over the years by Gemalto, its technology, experience and employees helping Thales strengthen its offerings in digital security systems, including technology that helps to protect governments, airports and data. Gemalto’s offerings include digital security for enterprise and the cloud—which spills over into the Internet of Things—along with EMV chip cards, NFC for mobile phones, SIM cards, and authentication for online banking.
“I am convinced that the combination with Thales is the best and the most promising option for Gemalto and the most positive outcome for our company, employees, clients, shareholders and other stakeholders,” said Philippe Vallée, Gemalto CEO. “We share the same values and Gemalto will be able to pursue its strategy, accelerate its development and deliver its digital security vision, as part of Thales.”
The deal promises to add more than $3.5 billion in revenue to Thales’ balance sheets. Thales is buying Gemalto at a time of rapid change for the company. “Gemalto is well advanced in its transition from its historical markets to the fast-growing government, enterprise security, and industrial Internet of Things markets, with significant growth potential both in revenue and margin terms,” Thales said. It will finance the deal through cash and new debt. Thales expects the deal to close in the second half of 2018.