Thales has agreed a €4.8bn deal to acquire the struggling digital security firm Gemalto.
Gemalto was subject to an offer worth €4.3bn from rival Atos last week but a merger has now been agreed with Thales, the leading French electrical systems designer.
In a statement, both companies said they believe that the new entity will be a global leader in the digital security market, 'supporting the most demanding clients in their digital transformation'.
The deal, which is expected to close in the second half of 2018, isn't expected to lead to job losses at either company and is set to create €150mn worth of cost synergies by 2021.
"The acquisition of Gemalto marks a key milestone in the implementation of Thales’s strategy," said its Chairman and Chief Executive Officer Patrice Caine. "Together with Gemalto’s management, we have big ambitions based on a shared vision of the digital transformation of our industries and customers."
Gemalto, a digital security specialist headquartered in Amsterdam, has suffered a turbulent year with four profit warnings leading to a share price drop of 38%.
Its own CEO Philippe Vallée added: "I am convinced that the combination with Thales is the best and the most promising option for Gemalto and the most positive outcome for our Company, employees, clients, shareholders and other stakeholders.
"We share the same values and Gemalto will be able to pursue its strategy, accelerate its development and deliver its digital security vision, as part of Thales."