French aerospace and defense group Thales has agreed to acquire Dutch digital security firm Gemalto in deal valued at around €4.8bn ($5.6bn).

Thales made an all-cash offer of €51 per share for Gemalto, which represents a premium of 57% over the closing price on 8 December 2017.

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The firms intend to combine their digital assets within a new global business unit, which is expected to bolster Thales’ position in digital security market.

The combined entity will have more than 28,000 engineers, 3,000 researchers and over €1bn investment for research and development (R&D).

Estimated to add more than €3bn revenue to Thales’ business sales, the transaction will expand the firm’s portfolio of security software, biometrics, multifactor authentication, secure digital and physical credentials.

Gemalto CEO Philippe Vallée said: “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.”

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Gemalto offers secure transaction solutions to banks such as EMV chip cards and payment terminals.

The firm further provides user authentication systems for online banking, including one-time token generating hardware devices for 2FA.

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

The acquisition is subject to customary regulatory approvals and clearances, and is expected to be closed in the second half of next year.