Thales Outflanks Atos With Surprise 4.76 Billion Euros Gemalto Bid

French aerospace specialist Thales knocked out Atos’s unsolicited attempt to buy Dutch cybersecurity provider Gemalto, outbidding the rival with a cash offer valued at 4.76 billion euros that won backing from the target company, according to Bloomberg.

The offer for 51 euros a share comes less than a week after the 46-euro bid by Atos, which Gemalto rejected as “significantly“ undervaluing the company. Thales received unanimous support for its overture from Gemalto’s board, gaining the upper hand with an offer 11 percent above its rival in the biggest bet yet for CEO Patrice Caine since he took over three years ago. Atos responded by saying it’ll no longer pursue Gemalto, but will remain available to discuss a combination if Thales offer isn’t completed.

The surprise appearance of Thales outmaneuvered Atos CEO Thierry Breton, a former French Finance Minister, whose earlier offer got a lukewarm response. Both suitors were drawn by Gemalto’s security products that help protect companies and governments against data hacks and identity theft in an increasingly connected world. Thales is the bigger of the two interested companies and has a powerful shareholder in the French state, which owns about 25 percent and is also the single largest investor at Amsterdam-based Gemalto.

Gemalto CEO Philippe Vallee, who will keep his post under the new owner, said his company was swayed by Thales’s financially more attractive offer, “but also the acceleration in our strategy and the overall rationale of the transaction that convinced the board.“

The Gemalto transaction would be Europe’s biggest technology deal this year, highlighting how companies are clamoring for online security expertise as data breaches around the world become more prevalent. For Thales, the offer marks a major strategic expansion away from its core business, which covers areas such as avionics equipment and air-traffic management, where Thales is the global leader.