The French government has presented a non-binding offer to acquire Atos’ advanced computing business, valuing the unit at €500 million. This division encompasses the company’s artificial intelligence operations and supercomputing capabilities, critical for applications such as nuclear deterrence.
Key Details of the Offer
The advanced computing branch employs 2,500 staff and generated approximately €570 million in revenue in 2023. The offer, which expires at the end of May, includes an initial payment of €150 million upon the deal’s potential signing. Atos could also gain up to €625 million through performance-based bonuses.
Atos’ Financial Struggles
Atos has been grappling with significant debt and operational challenges. In September, the company revised its financial outlook, reducing its revenue target for 2024 from €9.8 billion to €9.7 billion. A series of issues, including supply chain disruptions and a weakening business climate, have eroded its market value.
To stabilize its finances, Atos initiated a restructuring process in early 2024. Over the summer, it announced plans to convert €2.9 billion of loans into equity. Additionally, bondholders and lenders agreed to provide €1.675 billion in new debt and €233 million in equity, potentially supported by a private industrial investor.
National Security Considerations
The French government has emphasized the strategic importance of Atos’ advanced computing technologies. Finance Minister Antoine Armand highlighted the role of high-performance servers and supercomputers in national defense, innovation, and employment.
“High-performance servers and supercomputers are critical technologies for our defense and sovereignty,” Armand wrote on X, confirming the government’s exclusive negotiations.
A previous bid for parts of Atos’ computing business in June failed to reach a conclusion.
Next Steps for Atos
The sale of its advanced computing division would significantly reduce Atos’ debt, but the company’s financial recovery remains contingent on raising €233 million through a rights issue. Shareholders are being offered the opportunity to purchase 13,497 new shares for every 24 shares they already own, aiming to bolster liquidity.
Atos has extended the deadline for this stock purchase and confirmed that its restructuring process is expected to conclude by early January 2025.
Additionally, Atos announced plans to sell its mission-critical systems and cybersecurity units, which together generated €340 million in revenue in 2023. A formal sale process for these businesses will be launched soon.
This development marks a pivotal moment for Atos, balancing its debt reduction efforts with safeguarding its essential role in national security.