Atos puts in $10 billion bid for DXC Technology

French IT consultancy Atos has offered an alleged $10 billion to acquire all shares of DXC Technology, a Tysons, VA-headquartered global IT consulting firm.

Reuters on Thursday reported that Atos approached DXC with the generous $10 billion figure, which is well above the firm’s $6.7 billion market capitalization. The two companies confirmed later that day that an offer had been made.

Paris-based Atos said in statement that it approached DXC about a “potential friendly transaction” that would create a “Digital Services Leader benefitting from global scale, talent, and innovation.”

Atos has 110,000 global employees and approximately $14.67 billion in annual revenue. DXC has 138,000 global employees and approximately $19.58 billion in annual revenue.

DXC said on Thursday that it had a received an “unsolicited, preliminary, and non-binding proposal from Atos SE on Wednesday night” to acquire all its shares, and that it was evaluating the proposal.

Shares of DXC rallied on the back of the news, rising nearly 10% to $29.02.

DXC was formed in 2017 from the merger of Computer Sciences Corporation (CSC) and the enterprise services business of Hewlett Packard Enterprise. The firm delivers services in analytics, applications, business process, cloud and platform, consulting, enterprise and cloud apps, modern workplace, and security to a diverse range of industries across the globe.

DXC currently serves 6,000 private and public sector customers in 70 countries.

Since Mike Salvino took on the CEO role in September 2019, he has been working to improve the firm’s debt position while re-evaluating its assets. This led to DXC selling off its UK healthcare operation to Dedalus, a health IT specialist, for $525 million in July 2020.

Atos, meanwhile, has been working to build up scale as clients seek to upgrade their technology infrastructure amid the pandemic. The firm made 12 acquisitions in 2020, most recently snapping up Dutch managed services provider Motiv. Atos in October acquired US-based Salesforce specialist Eagle Creek – adding more than 250 employees across four offices in Minnesota and the Dakotas.

If the DXC deal is made, it would be the largest transaction in Atos’ history by a fair margin. In 2018, the firm bought US-based Syntel for $3.6 billion. The transaction added 23,000 employees in 30 countries.