Thales splashes out $5.7bn for Gemalto

M&A in the infosec world has waited for the holiday season to go all out splashing its cash. A flurry of activity has occurred at the tail end of the year with considerable consolidation.

Proving that encryption and identity management is no slouch, Thales has made an eye-watering bid of $5.7bn to acquire Gemalto, a few days after Atos failed to make a successful bid.

The merged entity will create a near monopoly in encryption, key management, and HSMs. There is overlap between the two companies, and a fair amount of time will likely be spent picking apart the threads, de-duplicating services, and consolidaing divisions.

While there are alternative HSM offerings in the market, the combined presence of Thales and Gemalto will eclipse all others, both in general purpose, and payment processing HSMs.

The new company will also have a significant play in the identity as a service space. Although, it will remain to be seen if Gemalto will be content in dominating the areas it has greater presence in, or expand its offerings to broader cloud encryption, authentication, identity, and tokenization services.

Subject to regulatory approval, the deal is expected to close in the second half of 2018. Thales was advised by Lazard, Messier Maris & Associés, and Société Générale. Gemalto was advised by Deutsche Bank and JPMorgan.