The French aerospace industry giant Airbus SE is holding talks with its compatriot information technology firm Atos SE over buying its cybersecurity business unit, and has reportedly made an offer that values the division at around 1.8 billion euros ($1.97 billion), including debt.

Atos, which is facing fresh financial challenges, is revisiting its plans to sell off some of its major assets, almost a year to the day after Airbus failed in a previous bid to acquire the business division, the Wall Street Journal reported.

The company said today that it’s holding preliminary discussions with Airbus over the possible sale of its big data and security business. The talks have led to the opening of a due diligence phase, it added.

Shares of Atos rose more than 12% in the wake of the report, helping the stock to recover after losing about a third of its value in 2023.

Airbus confirmed the talks are underway, saying it has submitted a nonbinding proposal relating to the potential acquisition of the BDS business unit. The discussion are still ongoing, and there is no certainty that any deal will be concluded, the company said.

The plane maker, which is also a large defense contractor to the U.S. and European countries, said buying Atos’ BDS unit would help to enhance its portfolio of defense and security tools, providing it with strong capabilities in cybersecurity, artificial intelligence and advanced computing. Such a deal aligns with Airbus’s publicly stated ambitions to expand its presence in the aerospace, defense and cybersecurity industries. In a November earnings call, Airbus Chief Executive Guillaume Faury said recent geopolitical conflicts have reinforced demand for more innovative capabilities in defense, space and cyber.

Last year, Airbus made a concrete offer to buy a 29.9% stake in Evidia, as the BDS unit was formerly known, before pulling out in March. But since that failed bid, the financial pressures on Atos have grown, and the IT giant has adjusted its business strategy to ensure it can refinance and repay its debts. As a part of that process, Atos intends to widen its asset sale beyond the 400 million euro divestments it announced in July. The BDS unit is said to be a key lever in that strategy.

In a statement, Atos said it has received two proposals indicating a nonbinding interest in BDS, including the one from Airbus.

The company is also said to be considering other asset sales. For instance, it’s in talks to sell its Tech Foundations business unit to EP Equity Investment, a private equity firm led by Czech billionaire Daniel Kretinsky, but there is no guarantee any deal will be done. Atos also hasn’t ruled out the sale of other business assets, especially if the deal with EPEI doesn’t go ahead.

Atos has already managed to shift one of its major assets, having sold its Unify telecommunications business to Mitel Networks Inc. for an undisclosed price in October.

In addition to negotiating possible asset sales, Atos has also entered into fresh talks with its banks in order to maintain funding and refinance its debts to avoid uncertainty over its long-term outlook.

Image: Atos