Thales and Gemalto have announced that they have reached an agreement on a recommended all-cash offer for all issued and outstanding ordinary shares of Gemalto, for a price of €51 per share cum dividend.
Patrice Caine, Thales’s chairman and chief executive officer, commented, “The acquisition of Gemalto marks a key milestone in the implementation of Thales’s strategy. Together with Gemalto’s management, we have big ambitions based on a shared vision of the digital transformation of our industries and customers. Our project will be beneficial to innovation and employment, whilst respecting sovereign strategic technologies. We have a tremendous respect for Gemalto’s technological achievements, and our two groups share the same culture and DNA. I would like to personally thank Gemalto’s management and board of directors for their unanimous support, and I welcome warmly Gemalto’s 15,000 employees to our group. By combining our talents, Thales and Gemalto are creating a global leader in digital security.”
Philippe Vallée, Gemalto’s chief executive officer, added: “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. 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.”
Over the past three years, Thales said, it has significantly increased its focus on digital technologies, investing over €1 billion in connectivity, cybersecurity, data analytics, and artificial intelligence, in particular with the acquisition of Sysgo, Vormetric, and Guavus. 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). Altogether, this new business unit will represent c. 20% of pro forma group revenues and rank among the top three players worldwide, with €3.5 billion revenues in the fast growing digital security market.
Combined with Gemalto’s digital security portfolio, Thales will be positioned to offer an end-to-end solution to secure the full critical digital decision chains, from data creation in sensors to real-time decision making. This technology portfolio will put Thales in a highly differentiated position to provide enterprises and governments with a seamless response to the data security challenges that lie at the heart of their digital transformation.
By acquiring a global leader in trusted identities and data security, Thales adds over €3 billion of revenue to its digital business sales and acquires a set of technologies and competencies that have applications in all of Thales’s five vertical markets. The combination creates a portfolio including security software, expertise in biometrics and multifactor authentication, and the issuance of secure digital and physical credentials. These technologies, which combine diverse and constantly evolving use cases, are expected to yield significant commercial opportunities and revenue synergies in the years ahead.
Thales will combine its digital businesses into Gemalto, which will continue to operate under its own brand as one of the seven Thales global business units. Both the Thales and Gemalto management teams share a common industrial vision and endorse the growth project of this newly created digital security global business. Philippe Vallée will lead the combined digital security business.
Gemalto and Thales are technology-driven companies with world-class R&D capabilities and an extensive patent portfolio. R&D is at the core of Thales’s and Gemalto’s digital security businesses, and will remain so. The combined group will have more than 28,000 engineers and 3,000 researchers and invests more than €1 billion in self-funded R&D.
Thales does not anticipate any reduction in Gemalto’s workforce as a consequence of this transaction.
Employees who are included in the current Gemalto efficiency program are immediately offered access to Thales’s internal job boards and to the Thales internal mobility mechanism under the same conditions as Thales’s employees. Furthermore, Thales has committed to preserve employment in Gemalto’s French activities until at least the end of 2019. Thales recruited 6,000 people worldwide in 2017, and will actively pursue its human capital investments in the future.
Thales offers €51 in cash per Gemalto share cum dividend. The offer price represents a premium of 57% over the closing price as of 8 December 2017.
Gemalto is advanced in its transition from its historical markets to the fast-growing government, enterprise security, and industrial IoT markets, with significant growth potential both in revenue and margin terms.
Gemalto is a leader in digital security, with 2016 annual revenues of €3.1 billion and customers in over 180 countries. Our 15,000 employees operate out of 112 offices, 43 personalization and data centers, and 30 research and software development centers located in 48 countries.