Shares of DXC Technology (NYSE:DXC) popped as much as 12% today after the company confirmed that it had received an unsolicited takeover offer from Atos, a French multinational IT consulting company. Reuters had reported on the deal this morning, and the companies have both confirmed the offer. As of 12:10 p.m. EST, DXC shares were up 7%.
DXC said that it had received an "unsolicited, preliminary and non-binding proposal" from Atos last night to acquire all of DXC's outstanding shares. Prior to receiving the proposal, DXC's board had no idea that Atos was interested in an acquisition. Atos also confirmed its interest, suggesting that a friendly transaction could create a leader in digital services with global scale.
No financial terms regarding the offer were disclosed, but the Reuters report suggested that the deal would be more than $10 billion when including debt. DXC's current market cap is $7 billion, and the tech company has been working to reduce its debt load.
The acquisition would be Atos' largest purchase to date if it goes through. Atos investors seem skeptical, sending shares down 13% on the Paris Stock Exchange. Buying DXC would allow Atos to expand significantly in the U.S. Atos has been quite acquisitive in recent years and reportedly believes that the purchase would generate meaningful cost savings and other synergies.
Both companies warn that there is no certainty that a deal will be finalized. DXC's board will now evaluate the proposal.