View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
August 23, 2005

Deutsche Telekom: T-Systems the origin of surprising Atos move

Deutsche Telekom's IT services unit T-Systems is in talks to acquire Atos Origin, according to a report in German newspaper Handelsblatt. The report did not reveal its sources, but said T-Systems is considering a bid of about $4.9 billion for the French IT services company. The tie-up would be something of a surprise, especially as T-Systems is itself seen as a likely takeover target.

By CBR Staff Writer

Deutsche Telekom’s T-Systems unit is reportedly planning to buy Atos Origin.

Such a combination would create the third-largest IT services player in the world in terms of revenue. In 2004, Atos made sales of $6.5 billion and T-Systems made $12.9 billion, though a sizable chunk of that was in network support and integration services to its parent.

However, it would also be a surprising move. If anything, T-Systems is itself considered to be an acquisition target, and in recent years Atos has built its reputation as one of the few companies that can successfully digest other large services firms. It bought Origin for $2.3 billion in 2000, and Sema for $1.8 billion in 2003, both of which were integrated successfully.

Despite its ability to absorb rivals, last week Atos ruled out a major US acquisition in the near term. Xavier Flinois, a member of its management board, told Computer Business Review: We need a foothold in America as we have major clients with projects that extend to the US, but we don’t need massive scale. Our main objective is to become the number one [IT services company] in Europe. We are ahead of Capgemini and T-Systems, but to be ahead of IBM and EDS, we need to be in the top three or four in every country.

Atos now ranks as the second largest player in France behind Capgemini, one of the top 10 in the UK, and the sixth largest IT services vendor in Germany following the absorption of retail giant KarstadtQuelle’s internal IT department as part of the two companies’ $1.4 billion outsourcing contract announced last September.

Atos is currently profitable, unlike T-Systems, which has struggled in recent years. Most rumors to date have concerned the possibility of Deutsche Telekom selling it off as a result of its huge debts, which stood at $52.1 billion at the end of last year.

Content from our partners
Scan and deliver
GenAI cybersecurity: "A super-human analyst, with a brain the size of a planet."
Cloud, AI, and cyber security – highlights from DTX Manchester

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.