Paris-based Atos SA will merge with Origin, a unit of Koninklijke Philips Electronics NV, to create an IT services provider with 27,000 employees and operations in 30 countries, the companies announced Monday.
The creation of the new company, to be called Atos Origin, is supported by the management groups of both companies, according to a joint statement.
Under the terms of an agreement, Philips will receive 21.5 million newly issued Atos Origin shares, representing 48.9 percent of the combined company, in exchange for its 98 percent stake in Origin. The remaining 2 percent of Origin shares are held by former and current employees of the company.
Based on Friday's closing price on the Paris Bourse of 122 euros (US$110) per share, the deal is valued at 2.6 billion euros.
In addition, Philips will also receive two tranches of warrants of approximately 2.4 million Atos shares each, which can be exercised if the stock price after closing of the deal rises 50 percent within 20 months and 100 percent over 32 months, respectively, from a reference price of 104 euros.
Philips has also agreed to lower its stake in the combined company to 35 percent within two years, if certain conditions are met.
Atos Origin would have posted pro-forma revenue of 2.8 billion euros for 1999, the companies said.
In early trading on the Amsterdam exchange Monday, Philips' shares were selling at 55.35 euros, up 2.8 percent on the day. Trading in Atos shares was halted Monday following news of the deal.
Atos, in Paris, can be reached at +33-1-49-00-90-00, or via the Web at http://www.atos-group.com/. Philips, in Eindhoven, the Netherlands, is at +31-40-27-369-29, or at http://www.philips.com/.