Airbus Pulls up Hard, No Longer Buying 29.9% Stake in Atos-Owned Evidian
The Register (03/30/23) Kunert, Paul
Airbus has exited from talks to purchase nearly a third of Evidian following significant public pressure from TCI Fund Management's Christopher Hohn. Hohn asserted that the proposed transaction would essentially be a bailout of Evidian's parent company, Atos. Airbus said in a note to investors, "After careful consideration, Airbus SE has come to the conclusion that the potential acquisition of a minority stake of 29.9% in Evidian does not meet the company's objectives in the current context and under the current structure." Evidian oversees such segments as cloud operations, high performance computing, digital transformation, and security, and employs 59,000 people. Evidian generated more than $5.12 billion in sales in 2021. Later this year, it will be spun out of Atos to float on the Paris Exchange, under a plan that was conceived of in summer 2022. Airbus said on Feb. 16 it was in discussions to invest in the unit, citing Evidian's security and digital expertise. This appeared to be illogical to TCI Fund Management, which owns a 4% stake in Airbus valued at €4 billion. Hohn urged Airbus management to "immediately terminate negotiations" because investment "would be stranded capital and an extremely inefficient use of shareholder funds." In an open letter, Hohn wrote, "The transaction appears to be a bailout of Atos, a company that is burdened with unsustainable levels of debt and other liabilities." Airbus' decision leaves Atos without the "anchor shareholder" that Atos Chairman Bertrand Meunier was looking forward to. Airbus said it will continue to discuss "other potential options" with Atos and "pursue the work on the long term strategic and technological partnership...which has the potential to create significant value for both companies." The end of negotiations adversely affected Atos' share price, which fell nearly 17%. The partitioning of Atos is on track to proceed, with the other half—referred to by management as the Tech Foundation Company—overseeing datacenter, hosting, digital workplace, unified communications, and business process outsourcing. This entity has 49,000 staff members and generated $5.65 billion in sales in 2021. It is currently downsizing, and was seen as the least appealing part of the organization. Atos will need to find alternative funding to help pay for its costly internal transformation.
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