Tech giant linked to French cybersecurity is plummeting in value

The French government said Tuesday it is taking steps to protect Atos, a too-big-to-fail French technology giant that manages data and cybersecurity for the country’s nuclear weapons programs and military, as well as the upcoming Paris Olympics. towards financial uncertainty.

Shares of Atos fell more than 20 percent after Airbus, the European aerospace giant, said it had halted talks to buy Atos’ cybersecurity assets for up to 1.8 billion euros (about $2 billion) following a review of the company finances. Later, Atos said it would delay its earnings announcement, scheduled for Wednesday, “to evaluate strategic options.”

French Finance Minister Bruno Le Maire said the government had been closely monitoring the situation and was working on “a national solution” to protect Atos. “All of France’s interests will be protected,” Mr. Le Maire said, adding that he would use all the means at his disposal “to guarantee the protection of strategic activities.”

Atos is not a prominent name among the world’s largest technology companies, 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 past decade it has grown into a European data and supercomputing powerhouse, active in 69 countries, with 95,000 employees and an annual turnover of 11 billion euros.

Much of that growth depended on a debt-financed series of acquisitions, many of which came when Atos was led by Thierry Breton, a former finance minister and the European Union’s current internal markets commissioner. The company now faces €3.65 billion in loans and bonds that must be repaid or refinanced by the end of 2025.

In 2021, Atos’ share price took a hit after reports that it would acquire a US competitor, DXC Technology, for $10 billion. The deal was scrapped a month later over investor concerns, and Atos suffered another blow after accountants discovered accounting errors at two of its US operations. Atos also failed to keep pace with the rise of cloud computing by competitors such as Amazon and Microsoft, further eroding investor confidence. The company has had three CEOs in as many years.

In a rack On Tuesday, Atos said it is “actively evaluating strategic alternatives that take into account the sovereign imperatives of the French state.” The shares, which reached $75 three years ago, were trading at just $1.74 on Tuesday.

The most prized assets were targeted last year in a takeover bid by Daniel Kretinsky, a Czech telecommunications billionaire whose efforts were fiercely opposed by French politicians – some of whom have called for Atos to be nationalized to keep it in French hands.

Mr Le Maire stopped short of calling for nationalisation. But he said the government’s priority was to “identify solutions to stabilize the financial situation and provide all necessary visibility to stakeholders, especially the company’s employees.”

Atos owns, among other things, the supercomputer that enables the French army to simulate nuclear bomb tests after the government banned physical testing in 1996. Électricité de France recently selected an Atos entity, Eviden, to supply control systems for six nuclear reactors that the French government plans to build over the next decade.

Atos software is used for French Rafale fighter jets and even for the secure telephone lines of the French armed forces. Airbus, which builds fighter jets and military helicopters, had expressed interest in Atos’ big data and cybersecurity assets as it expands its program amid a surge in European defense budgets.

Airbus said in a short statement on Tuesday that it was terminating talks with Atos, but did not give a reason.

Atos’ software and computing power are also used by France’s national tax and healthcare authorities. The company recently won the contract to host personal data and provide cybersecurity for the Paris Olympics this summer.