Security and defence company Thales sealed a €4.8 billion deal to acquire SIM and authentication company Gemalto after outbidding rival Atos by €500 million.

Thales emerged as a surprise bidder over the weekend and its offer was unanimously accepted by Gemalto’s board. In a joint statement, the companies said the merger would create a global market leader in digital security.

The terms of the agreement allow the deal to be revised or terminated in the event of an offer nine per cent higher than the agreed amount. However, as news broke of the Thales bid, rival Atos dropped its interest.

Gemalto last week turned down the advances of Atos, describing its €4.3 billion offer as an “opportunistic” bid which undervalued the company. Gemalto was also critical of the level of detail contained in the proposal.

Thales plans to merge Gemalto with its existing digital business unit, which develops products related to cybersecurity, artificial intelligence and data analytics.

“The acquisition of Gemalto marks a key milestone in the implementation of Thales’s strategy,” Thales CEO Patrice Caine said: “Together with Gemalto’s management, we have big ambitions based on a shared vision of the digital transformation of our industries and customers.

“By combining our talents, Thales and Gemalto are creating a global leader in digital security.”

Gemalto CEO Philippe Vallee (pictured) 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.”

The proposal will now go to regulators for approval. The deal is expected to close in the second half of 2018.