- Airbus ends talks over buying Atos' BDS unit
- Latest setback sends Atos shares tumbling
- Airbus shares rise on renewed buyback hopes
PARIS, March 19 (Reuters) - Airbus has called off talks to buy the BDS cybersecurity unit of France's Atos, sending shares in the software company tumbling by more than a fifth.
It is the second time in a year that the European planemaker has axed proposals to buy assets of debt-laden Atos after it declined to make an offer for a minority stake in a broader business a year ago following a backlash from its own investors.
It adds to mounting pressure on Atos, which specializes in spy-to-AI assets deemed strategic by the French government, on the heels of profit warnings, a revolving-door of CEOs and the collapse of another potential asset sale just a few weeks ago.
Atos' shares sank around 21% in late morning trading to an all-time low.
"The failure of this sale process poses both a liquidity problem...and a problem regarding debt restructuring," analyst Nicolas David from Oddo BHF said.
The two companies announced the collapse of talks for Airbus to buy BDS, including its key big data activities, in brief statements.
Atos said it was "evaluating strategic alternatives that will take into consideration the sovereign imperatives of the French state".
Atos secures communications for the French military and secret services and manufactures servers to make supercomputers able to process troves of data for research or to develop the nascent artificial intelligence industry.
Airbus did not provide details on pulling out of the BDS deal but a person familiar with the matter said Airbus had concerns over risk and broader turmoil surrounding Atos.
'POLITICAL DEAL'
Airbus investors appeared relieved after the European aerospace group - no stranger to political machinations among its founding nations including France - sidestepped what some had feared would be a politically inspired rescue.
Shares in Airbus rose about 1.8%.
Without the deal, which had been valued at 1.8 to 2.0 billion euros, Airbus has more scope to return cash to shareholders as it rides high against Boeing in the jet market.
"We had seen the deal as a negative for Airbus, given concerns that this might be a political deal, and its negative impact on buyback potential," Jefferies analyst Chloe Lemarie wrote.
Atos, formed partly by acquisitions made under former CEO Thierry Breton, EU industry chief and a former French finance minister, has deep links to France's security world in which the state has the ultimate say over tie-ups.
Founded from pan-European mergers, Airbus is headquartered in France but its defence arm is mainly weighted towards Germany despite close ties to Paris over nuclear weapons and ballistics.
There was no immediate comment from the French finance ministry or from Atos' leading shareholder, Onepoint.
Some industry sources said the spotlight would now fall on French defence electronics group Thales as a potential suitor. The company played down such a deal, with CEO Patrice Caine saying earlier this month Thales's position had "not changed for months and months."
Thales has said it has no intention to diversify beyond its core areas of aerospace, defence and digital identity systems. The company declined comment on the Airbus decision.
Tuesday's market reaction comes as Atos has already seen its shares plummet over the last two years after missteps including a badly received takeover plan for U.S. rival DXC in 2021.
In February, talks between Atos and Czech billionaire Daniel Kretinsky over the sale of Atos' legacy operations collapsed, though some reports suggest he is considering a fresh bid.
Reporting by Olivier Sorgho and Diana Mandiá in Gdansk, Tim Hepher and Ingrid Melander in Paris; Editing by Bernadette Baum
Source: Reuters