European aerospace company Airbus SE (FR:AIR) is strategizing a €1.8 billion buyout deal for Atos SE’s (DE:AXI) big data and cybersecurity unit called BDS. The two companies are expected to announce the deal today, while Airbus will conduct a due diligence process on BDS.
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Airbus SE designs, manufactures, and provides aerospace products, space, and related services. It is one of the largest commercial aircraft manufacturers in the world. AIR shares have gained 25.1% in the past year.
Meanwhile, Atos is a France-based IT services provider. Atos provides managed services, consulting and systems integration, Big Data and security, and Worldline (transactional services) across various sectors. AXI shares have lost 32.6% of their value in the past year.
Here’s Why the Deal is Relevant to Airbus and Atos
For Atos, selling BDS is a means to releasing liquidity as it seeks to deal with debt worth €2.25 billion maturing in 2025. Atos’s recently appointed chairman, Jean Pierre Mustier, is tasked with the mission of restructuring the company’s debt load and streamlining operations. The company’s shares have taken a huge hit owing to the financial pressure and a downgrade by rating agencies.
At the same time, Airbus has been explicit about its plans to expand its cybersecurity services. Airbus CEO Guillaume Faury is excited about the deal because he believes the aerospace industry is largely driven by big data, connectivity, and high-power computing technology. Airbus’ earlier attempts to collaborate with Atos have faced a roadblock owing to shareholder rejection. Meanwhile, Airbus has been able to break its own record by delivering airplanes in the mid-730 range in 2023. Airbus had targeted deliveries of 720 aircraft in the last year. Full details of the deliveries will be announced on January 11.
In the meantime, other bidders could roll out offers for BDS since the talks between Airbus and Atos are not exclusive. Reports suggest that French defence electronics company Thales (FR:HO) could be a probable bidder. Dassault Aviation, a jet fighter manufacturer, is one of the largest shareholders in Thales, which could prompt Thales to make an offer for BDS.
Is Airbus Stock a Good Buy?
Analysts are split about Airbus stock’s trajectory. On TipRanks, AIR stock has a Moderate Buy consensus rating based on seven Buys, four Holds, and two Sell ratings. The Airbus SE share price target of €148.43 implies 5% upside potential from current levels.
