IT consulting group Atos has made a takeover approach to buy U.S. rival DXC Technology and values the NYSE-listed business at more than $10 billion, Reuters reported.
Atos is working with advisers on a possible deal for DXC, a former Hewlett Packard Enterprise unit, and made a formal approach earlier this week.
Atos issued a statement confirming a Reuters report that is seeking to buy DXC in what it said was a “friendly transaction” to create a digital services powerhouse with a global presence.
The French firm made a formal approach to DXC this week valuing the New-York listed company at more than $10 billion including debt, two sources told Reuters on condition of anonymity.
DXC said it received a takeover proposal on Wednesday and had no prior knowledge of any interest from Atos. It called the offer “unsolicited, preliminary and non-binding”, adding its board of directors would evaluate it.
Discussions are still at a preliminary stage and there is no certainty that a deal will be agreed. A tie-up with DXC would boost Atos’ presence in the United States, giving it access to a range of clients and B2B products including analytics and cloud applications as well as IT outsourcing services.
It will also lead to synergies and cost savings for Atos, which has been on an acquisition spree over the past 12 months. Representatives at Atos and DXC were not immediately available for comment.
DXC Technology in November 2020 said it recently closed the sale of its U.S. State and Local Health and Human Services business for $5 billion and paid down $3.5 billion of debt, strengthening balance sheet.
DXC Technology is in the process of completing the sale of its Healthcare Provider Software business to Dedalus by the end of this fiscal year.
Options Technology, a provider of IT infrastructure to capital markets firms backed by Abry Partners, is set to purchase Fixnetix, a DXC Technology Company.
DXC Technology reported revenue of $4.55 billion and net loss of $246 million for the second quarter of fiscal year 2021.
Reuters on June 24 reported that the French IT consulting group would target more acquisitions and expected to grow its revenue in the mid-term by 5-7 percent.
Atos recently announced two acquisitions: Paladion, a cybersecurity firm, and Alia, a digital consulting company which specialises in the energy sector.
“Digital, Cloud, Security, and Decarbonization are expected to represent 65 percent of group revenue in the mid-term compared to 40 percent today, reflecting a major change in the Group offering,” said chief executive Elie Girard.
Atos also anticipated more than 2 billion euros in mid-term revenue from its digital security business.
Atos bought artificial intelligence and data science firm Miner & Kasch in April and U.S.-based cloud consulting group Maven Wave, as well as cybersecurity firm IDnomic and energy specialist X-Perion in 2019.
