AMSTERDAM-Europe’s Gemplus International S.A. and Axalto N.V., the world’s two largest smart card vendors, announced plans to merge in an all-stock transaction. If approved, the combined company would have 2005 revenues of $2.1 billion and would be called Gemalto.
“This transaction is an important development for Gemplus, Axalto and the digital security industry as a whole,” said Alex Mandl, Gemplus’ president and chief executive officer. “This merger, with a sound industrial logic, is a win-win that will create value not only for our respective shareholders but also for our clients and employees. We are confident in our ability to deliver significant value to our shareholders.”
The companies said the combined operations would save up to $100 million in three years, mainly from cost savings in “volume effects, supply chain efficiencies and sharing of best practices.” The companies also said they expect job cuts costing around $50 million, but did not provide specific numbers.
Gemplus and Axalto provide smart cards to a variety of industries, including wireless. Indeed, the two companies manufacture most of the market’s Subscriber Identity Module cards, which allow users to move information between GSM-based handsets.
