Once a shining star in the French business world,
Atos
is now facing a critical juncture. Its share price has plummeted, debt threatens to drown it, and a potential break-up looms. Here is what happened to the company that was a key supplier to the French nuclear industry and the
Olympic Games
.
What made Atos a giant
Founded in 1997 from the merger of several IT providers, Atos has undergone numerous transformations over the years.
Atos bought Siemens IT Solution and Services in 2011, French supercomputing leader Bull in 2014,
Xerox ITO
for $1 billion the same year, and the US player Syntel in 2018 for $3.4 billion. Atos’ market capitalization surged and the company entered
France
’s blue-chip CAC 40 index in 2017. By 2022, the firm had revenue of $12.1 billion), and now employs 105,000 people worldwide.
What led to the downfall
* A series of missteps, including a failed acquisition of US competitor DXC Technology Co. for $10 billion.
* Accounting errors: In 2021, Atos lost more than €1 billion in market value after it disclosed that auditors had found accounting errors at two of its US entities.
* Leadership changes: The company has seen five different chief executive officers over the past two and a half years. This further eroded investor confidence.
* Slow to adapt its core business: They struggled to adapt to the cloud computing shift, losing ground to competitors like Amazon and Microsoft. This led to declining profits, a shrinking market value, and a debt burden of €2.4 billion.
What assets of Atos are for up sale
* Atos is considering selling off its legacy IT business.
* The company's Strategic BDS unit (cloud, cybersecurity) in talks with Airbus for €1.8 billion.
* Atos is negotiating with a court-appointed mediator to refinance their debt. Lawsuits have been filed against management for lack of transparency.
* French IT giant's future hinges on successfully restructuring, securing new funding, and regaining investor trust. Restructuring efforts are underway to address debt of €2.4 billion due in 2025.
What next for Atos
Atos' survival depends on successfully managing its debt, selling assets, and adapting to the changing IT landscape. The outcome will impact not only the company itself but also its employees, partners, and the French IT sector.
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