Atos to acquire Syntel for $3.4 billion

French IT services group Atos and Syntel have entered into a definitive merger agreement under which former will acquire latter for cash consideration of $3.4 billion i.e. $ 41.0 per share.

This transaction is a major step in the strategy of Atos to reach a global scale and significantly expand in both Digital services and Business & Platform Solutions, Atos said.

Syntel will enhance Atos's Digital Transformation Factory thanks to a powerful suite of digital and proprietary solutions recognized by leading industry analysts as being the most advanced in Cloud, Social Network, Mobile, Analytics, Cloud and IoT, the joint statement by the companies informed.

Thierry Breton, Chairman, and CEO of Atos said: "It represents a transformational step for our Business & Platform Solutions Division as it will significantly enhance its growth and profitability profile through an extended digital services offering, cutting-edge India-based delivery platforms, as well as revenue and cost synergies.

In particular, the highly complementary portfolio, customer base, and geographic footprint of the combination between Atos and Syntel will significantly enhance our presence in North America and accelerate the digital transformation of Atos's customers worldwide."

The transaction is structured as a one-step cash merger between Syntel and Atos requiring above 50 percent of Syntel outstanding share capital to execute the merger.

On July 20, 2018, the Board of Directors of Syntel unanimously approved the transaction based on the unanimous recommendation of a special committee of the Syntel Board. Written voting agreements with Syntel shareholders, including founders, to vote in favor of the transaction represent 51 percent of the outstanding shares.

Bharat Desai, Co-Chairman, and Co-founder of Syntel said: "The Syntel board is committed to maximizing shareholder value and believes that the agreement with Atos achieves that objective and delivers a win-win proposition to our customers and employees.

Our focus at Syntel is to help customers transform and succeed in the digital economy. Since its founding, our "Customer for Life" ethos has guided our investments in high-impact, domain-led services, and intellectual property."

Syntel generated $924 million revenue in 2017, of which 89 percent was in North America, with 25 percent operating margin.

The Group employs 23,000 engineers in 30 countries, with over 18,000 staff based in India. All of Syntel's management team is expected to join Atos.