Siemens has agreed to sell its unit Siemens IT Solutions and Services to Atos Origin for EUR 850 million. As part of the deal, Siemens is acquiring a 15 percent stake in Atos Origin, which it will hold on to for at least five years. Siemens will receive 12.5 million new Atos Origin shares worth currently EUR 414 million, a five-year convertible bond of EUR 250 million and a cash payment of approximately EUR 186 million. The transaction is expected to close by July 2011, pending works council consultation, antitrust approval and a vote by from Atos Origin shareholders planned for the end of June 2011. The transaction will create a leading IT services company with pro forma 2010 revenues of approximately EUR 8.7 billion and 78,500 employees worldwide. As part of the transaction, Siemens concluded a seven-year outsourcing contract worth around EUR 5.5 billion, under which Atos Origin will provide managed services and systems integration to Siemens. Atos Origin and Siemens will jointly develop new IT products for which both parties are committed to investing EUR 50 million each. The new company, which claims the largest European managed services platform, will be positioned to deliver cloud computing services, system integration including consolidation and harmonisation, energy and product life management, and electronic payments and transaction-based activities.
For 2011, with 12 months for Atos Origin and six months for Siemens IT Solutions and Services (July to December), the company targets revenue evolution in line with market growth, operating margin at circa 6 percent, neutral EPS effect compared to Atos Origin standalone and a free cash flow slightly higher than Atos Origin standalone in 2011. For 2013, the outlook of the combined entity is revenue in the range of EUR 9-10 billion, an operating margin of 7-8 percent, EPS growth accretion in excess of 50 percent compared to the combined group EPS in 2011 and a free cash flow of EUR 350-400 million.
