Atos abandons plans to buy U.S. company DXC Technology

The French IT group Atos announced on Tuesday to abandon the acquisition of the U.S. services company DXC Technology, which it had “approached” in January for a “potential friendly transaction” for an undisclosed amount. On the Paris stock exchange, Atos shares were up 4.19% to 68.12 euros on Tuesday morning at around 09:25 (08:25 GMT), in a market up 0.9%.

In a statement, the French group said that “following the statement issued by the company on 7 January 2021, the Atos board of directors has unanimously decided not to pursue a possible transaction with DXC Technology.” Its objective was “to create a leader in digital services”, said Atos in January, whose announcement had caused its share price to plunge by more than 11%.

Undervaluation

For its part, DXC Technolgy – which had revenues of $19 billion in its fiscal year ending March 2020, and a market capitalization of $6.5 billion – reported an offer that “undervalued” its value, according to its board of directors’ findings. Citing sources familiar with the matter, Reuters estimated last month that Atos had made a bid to DXC Technology valuing it at more than $10 billion (€8.28 billion), which would have resulted in the largest acquisition ever made by the French group. The U.S. group says that the offer from Atos was “unsolicited, preliminary and non-binding”, and that it had previously “no knowledge of any interest from Atos”.

DXC Technology was formed in 2017 from the merger of Hewlett Packard Enterprise (HPE) and CSC’s enterprise services business. In 2019, Atos had revenues of €11.6 billion. Its market capitalization stood at €7.2 billion on Tuesday before the opening of the Paris stock exchange.