Atos bids $10 billion for DXC Technology to form industry giant

Atos is looking to kick off the year in style with a potential mega acquisition. In a press statement confirming rumours, the global IT-services giant has verified that it has put in a bid of allegedly more than $10 billion for DXC Technology, in a move that would more than double its global headcount.

Earlier this week, reporting by Reuters broke the news of potential talks between the two companies, and yesterday Paris-listed Atos confirmed that it has taken the step to initiate “a potential friendly transaction” with DXC Technology to “create a digital services leader benefitting from global scale, talent and innovation.” 

Atos was quick to add that “talks are in very early stages” and as a result “there can be no certainty at this stage that this approach will result in any agreement or transaction.” DXC Technology has since confirmed the bid, stating that it has received an “unsolicited, preliminary and non-binding proposal to buy all of its shares.” 

If the deal would go through, it would add nearly 140,000 employees to its headcount of 110,000, lifting its total to around 250,000 staff globally, significantly closing the gap with French-origin rival Capgemini, which currently has 270,000 staff on its payroll. 

US-headquartered DXC Technology was formed in 2017 from the merger of Computer Sciences Corporation and the bulk of Hewlett Packard Enterprise’s tech-services business, and is currently valued at about $6.7 billion. The IT services group has 6,000 customers across 70 countries. Atos has operations in 75+ countries, and generated revenues of €12 billion in its latest financial year. 

Atos’ interest builds on its growth strategy to become a “leading player in the IT services market”, with inorganic bolt-ons an integral part of its plan to achieve the goal. In the last twelve months alone, Atos has acquired or entered into negotiations with twelve companies, the latest being Motiv ICT Security in the Netherlands and two Salesforce players in the US and France. 

While DXC Technology would be its largest acquisition ever, estimated at triple the size of the Syntel deal in the US, shareholders have so far not been impressed: Atos’ stock price dropped following the revelation, while DXC saw its share price soar on the back of the news.

Meanwhile, Atos is also reported to be holding talks with Dell Technologies on buying its managed security services provider Secureworks.