Two Secure Plastic Card Firms in Merger of Equals

Cleary Gottlieb is representing secure plastic card makers Axalto and Gemplus International in their recently-announced merger of equals, advising both companies on U.S. and E.U. antitrust matters. The boards of both companies have given unanimous approval to the merger, which will be structured as an exchange offer by Axalto for Gemplus. The resulting company will be known as Gemalto.

Gemplus shareholders will receive 2 Axalto shares for every 25 Gemplus shares owned. There will be a distribution of ¬0.26 per share to be made pre-offer by Gemplus to its shareholders. The distribution represents an amount of approximately ¬163 million based on current Gemplus shares outstanding. The Texas Pacific Group and Quandt family entities, Gemplus’ largest shareholders, have agreed to contribute their shares to Axalto prior to the launch of the offer at the same exchange ratio. Gemplus shareholders will receive in total, assuming full acceptances, approximately 50.2 million newly issued Axalto shares, representing 55.4% of the outstanding capital of the combined group, with Axalto shareholders representing 44.6% of the share capital.

Gemalto will be registered in the Netherlands, and will have operations in more than 50 countries, with large operational centers in the Paris and Marseilles areas, employing approximately eleven thousand people.