PARIS — The French government offered to buy the defense-strategic assets from struggling information-technology company Atos to keep them from falling under foreign control.

Atos received a non-binding letter of intent from the French state on April 27 to buy all of its business in advanced computing, mission-critical systems and cybersecurity, representing about €1 billion (US $1.1 billion) in sales last year, the company said in an April 29 statement.

Atos builds the supercomputers used in France’s nuclear-deterrent program, designed the Scorpion combat-information system being rolled out to equip the country’s land forces, and was picked in 2019 to lead development of a big-data platform for the French Armed Forces Ministry. The company posted a record loss in 2023, and has been in talks with its banks to restructure an unsustainable level of debt.

“The aim is to keep Atos’ strategic activities under the exclusive control of France,” Finance Minister Bruno Le Maire told broadcaster LCI in an interview on Sunday. “We’re taking the initiative, because it’s the role of the state to defend Atos’ strategic interests, and to avoid that sensitive technologies that are crucial in terms of supercomputers or defense, could depend on foreign interests at any time.”

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Airbus in March ended talks to buy Atos’ Big Data & Security unit, prompting the French finance ministry to say it would find a national solution to protect the company’s strategic activities. France is targeting assets accounting for about two-thirds of the BDS unit, representing an enterprise value of between €700 million and €1 billion, Atos said.

“The group welcomes this letter of intent, which would protect the sovereign strategic imperatives of the French state,” Atos said.

Due diligence will start “shortly,” in view of a confirmatory non-binding offer by early June, the company said. The letter of intent provides for limited exclusivity regarding the targeted assets until either July 31 or the conclusion of a global restructuring agreement, whichever comes first, Atos said.

Le Maire said state-shareholding agency APE will buy the strategic Atos assets, though other French sovereign players could participate, along the models of French warship builder Naval Group and nuclear-reactor supplier TechnicAtome.

The French state owns 62.3% of Naval Group, with Thales holding a 35% stake. APE owns 50.3% of TechnicAtome, whose reactor power France’s aircraft carrier and submarines, with other shareholders including Naval Group and state-owned electricity company EDF.

“We’ll have to wait and see what other shareholders might participate,” Le Maire said. “And I mean only French shareholders working in strategic fields, for example in defense or aeronautics.”

France has extensive shareholdings in its defense companies, including a 26.1% stake and 35.4% voting share in publicly-traded Thales, and half of French-German weapons maker KNDS. French law requires foreign investors to seek approval from the Ministry of the Economy before investing in sensitive sectors or strategic assets, so-called covered activities.

“We’re going to take control of all Atos’ strategic activities, and that’s a big decision,” Le Maire said. “When we see a threat to a private group involved in strategic activities, I take my responsibilities, and I guarantee that these strategic activities will remain French.”

Rudy Ruitenberg is a Europe correspondent for Defense News. He started his career at Bloomberg News and has experience reporting on technology, commodity markets and politics.

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