(Reuters) - French IT consulting group Atos SE and U.S. rival DXC Technology Co said on Tuesday they have decided to discontinue talks about a potential acquisition.
Reuters reported in January, citing sources, that Atos made a formal approach valuing New-York listed DXC at more than $10 billion including debt, in what would have been the deal-hungry IT consulting group's biggest acquisition to date.
Shares in Atos, which last month confirmed an approach to DXC, surged by around 6% in early Paris trading, as investors welcomed it walking away from a deal which could have been expensive for it.
"After sharing certain high-level information in order to help Atos understand why the board believes the proposal undervalued DXC, Atos and DXC today agreed to discontinue further discussions," DXC said.
Atos issued a separate statement to say its board of directors had made a unanimous decision to end the talks.
DXC, which was founded in 2017 when Hewlett Packard Enterprise spun off its enterprise services business, has been grappling with rising debt, with boss Mike Salvino taking the helm in 2019 and subsequently announcing a strategic review of non-core assets.
Atos spent $3.4 billion to buy Michigan-based IT services provider Syntel in a cash deal in 2018, its biggest deal ever.
Atos is now looking to take advantage of investor appetite for pandemic-resilient technology assets to clinch a deal that would be in the region of its own market value of 8.2 billion euros ($10.1 billion), Reuters reported last month, citing sources.
(Reporting by Rama Venkat in Bengaluru; Editing by Shounak Dasgupta and Amy Caren Daniel and Kirsten Donovan)