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Atos opens 'exploratory talks' with possible investors in breakaway Evidian biz

Aircraft maker Airbus linked with IT services provider's security, digital and big data unit

Atos is holding "exploratory talks" with potential investors - believed to include Airbus - over taking a minority shareholding in the IT services group's breakaway security, digital and big data businesses.

The share price of Atos climbed several percent yesterday following a report by French newspaper Les Echos that preliminary discussions with the aircraft designer and maker were underway, sending the stock past the €11 ($11.58) mark.

A corporate mouthpiece at Atos said via email "the company had initiated exploratory discussions with potential future minority shareholders in the scope of activities grouped under the name of Evidian."

"Atos recalls that the strategic plan communicated to the market on June 14, 2022, foresees that Atos retains up to 30% of the capital of the Evidian scope, and that the sale of this interest ensures the financing of its own transformation plan."

It added that talks had "not sufficiently advanced to allow any further comment".

At the aircraft manufacturer, a spokesperson for Airbus said in a statement that it would not comment on speculation. It said: "We are in constant discussion with our partners, customers and suppliers across the industry, but these conversations remain private in nature."

The plan to break Atos in two was hatched by the board in June; it will see the Evidian business be listed as as separate entity on the Paris stock exchange at some point this year. The unit, which turned over €5.12 billion ($5.39 billion) in 2021, is involved with Big Data, Digital and cybersecurity. This business will be headed by Philip Oliva and will employ 59,000 people.

The other part of Atos, including Data Centre and Hosting, Digital Workplace, Unified Comms and Business Process Outsourcing, is shrinking and will be the subject of an "ambitious turnaround," the company said last summer.

This involves making cost savings of $1.15 billion by 2026 and incorporates steps to rationalize the portfolio, exiting or turning around low-margin customer accounts, reducing third party spending, consolidating datacenter real estate, and chopping headcount.

In July, Atos parted ways with 12,000 staff and added 16,000 more in off-shore or near-shore locations amid mounting losses.

Not everyone is buying into the strategic aims of the management team at Atos, with investor Sycamore Asset Management claiming the turnaround blueprint is "too ambitious and complicated."

Atos has itself already rejected an enthusiastic bid from IT service rival Onepoint and private equity house ICG, which valued Atos at €4.2 billion ($4.43 billion).

As with DXC Technology and former IBM unit Kyndryl, Atos' datacenter and BPO divisions have been sucker-punched by customers moving to the cloud, and is belatedly reacting. ®

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