Thales and Gemalto create a world leader in digital security

17.12.2017

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51 offer price, representing a premium of 57% over the closing price as of 8 December 2017

All-cash offer unanimously recommended by Gemalto's Board of Directors and unanimously approved by Thales's Board of Directors

Creation of a global market leader in the fast-growing digital security market, supporting the most demanding clients in their digital transformation

Thales to combine its digital assets with Gemalto, within a new Global Business Unit

Thales (Euronext Paris: HO) and Gemalto (Euronext Amsterdam and Paris: GTO) announce today that they have reached an agreement (the Merger Agreement ) on a recommended all-cash offer for all issued and outstanding ordinary shares of Gemalto, for a price of 51 per share cum dividend.

Patrice Caine, Thales's Chairman and Chief Executive Officer, commented: The acquisition of Gemalto marks a key milestone in the implementation of Thales's strategy. Together with Gemalto's management, we have big ambitions based on a shared vision of the digital transformation of our industries and customers. Our project will be beneficial to innovation and employment, whilst respecting sovereign strategic technologies. We have a tremendous respect for Gemalto's technological achievements, and our two Groups share the same culture and DNA. I would like to personally thank Gemalto's management and Board of Directors for their unanimous support and I welcome warmly Gemalto's 15,000 employees to our Group. By combining our talents, Thales and Gemalto are creating a global leader in digital security.

Philippe Vall e, Gemalto's Chief Executive Officer, added: I am convinced that the combination with Thales is the best and the most promising option for Gemalto and the most positive outcome for our Company, employees, clients, shareholders and other stakeholders. We share the same values and Gemalto will be able to pursue its strategy, accelerate its development and deliver its digital security vision, as part of Thales.

Alex Mandl, Chairman of Gemalto's Board of Directors, stated: The Board of Directors, after full and careful review, together with its financial and legal advisors, of the various options available to the Company, has established unanimously that the Thales offer is in the best interests of Gemalto and all its stakeholders. As a result, the Gemalto Board of Directors unanimously recommends the Thales offer to its shareholders.

Creation of a global digital security leader

Acceleration of Thales's digital strategy

Over the past three years, Thales has significantly increased its focus on digital technologies, investing over 1 billion in connectivity, cybersecurity, data analytics and artificial intelligence, in particular with the acquisition of Sysgo, Vormetric and Guavus. The integration of Gemalto strongly accelerates this strategy, reinforcing Thales's digital offering, across its five vertical markets (aeronautics, space, ground transportation, defence and security). Altogether, this new business unit will represent c. 20% of pro forma Group revenues and rank among the top three players worldwide, with 3.5bn revenues in the fast growing digital security market.

Unique and innovative technology portfolio in an IoT, Mobile and Cloud World

Combined with Gemalto's unique leading digital security portfolio, Thales will be ideally positioned to offer an end-to-end solution, to secure the full critical digital decision chains, from data creation in sensors to real-time decision making. This unrivalled and innovative technology portfolio will put Thales in a highly differentiated position to provide enterprises and governments with a seamless response to the data security challenges that lie at the heart of their digital transformation.

Creation of a global leader in digital security and cybersecurity

By acquiring a global leader in trusted identities and data security, Thales adds over 3bn of revenue to its digital business sales and acquires a set of technologies and competencies that have applications in all of Thales's five vertical markets. The combination creates a powerhouse with a solution portfolio including security software, expertise in biometrics and multifactor authentication and the issuance of secure digital and physical credentials. These technologies, which combine diverse and constantly evolving use cases, are expected to yield significant commercial opportunities and revenue synergies in the years ahead.

Both Thales and Gemalto are experts at addressing the needs of the most demanding clients who are facing data security challenges. These include all operators of critical infrastructures including banks, telcos, governments, utilities, and general industries. This combination will reinforce and further globalise Thales's footprint.

Capacity to address all customer digital security needs

Thales will combine its digital businesses into Gemalto, which will continue to operate under its own brand as one of the seven Thales global business units. Both the Thales and Gemalto management teams share a common industrial vision and endorse the growth project of this newly created digital security global business. Philippe Vall e will lead the combined digital security business.

R&D: the common DNA of Thales and Gemalto digital businesses Gemalto and Thales are technology-driven companies with world-class R&D capabilities and an extensive patent portfolio. R&D is at the core of Thales's and Gemalto's digital security businesses, and will remain so. The combined Group will have more than 28,000 engineers, 3,000 researchers, and invests more than 1bn in self-funded R&D.

A combination providing enhanced opportunities to Gemalto's employees and management Thales does

LINK:	https://www.thalesgroup.com/en/worldwide/security/press-release/thales...
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