France’s Thales on Dec. 17 said it has agreed to acquire Gemalto, a provider of a range of digital security solutions and capabilities, in a $5.7 billion deal to accelerate its strategy around digital technologies and data security.

Thales beat out France-based Atos, a European information technology services provider, which previously made an unsolicited $5.1 billion cash offer for Netherlands-based Gemalto. Atos said it will not pursue its original offer for Gemalto, citing its commitment to financial discipline.

Gemalto’s strengths are in authentication and protection. Its software is embedded in devices and objects to authenticate people and things. The company also has capabilities in data protection, key management, and secure credential issuance, including electronic passports.

In May, Gemalto acquired the identity solutions business of 3M Corp. [MMM] for $850 million, a deal that added biometric technologies and document security features to its product portfolio.

Thales said the acquisition will add about $3.7 billion in revenue related to digital business while adding technologies and capabilities it can apply to its core markets, which are aeronautics, space, ground transportation, defense and security. In 2016, Thales acquired Vormetric in a $425 million transaction that strengthened its capabilities in cyber security.

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

Thales said its strategy around digital technologies has included $1.2 billion in investments in connectivity, cyber security, data analytics and artificial intelligence over the past three years, including the acquisition of Vormetric.

Once the transaction closes, which is expected in the second half of 2018, Thales will create a new global business unit around its digital security business that will be led by Philippe Vallee, Gemalto’s CEO. The unit will have about $4.1 billion in annual sales to start, with 28,000 engineers and 3,000 researchers. Thales said it will retain the Gemalto brand.

Thales said its offer price represents a 57 percent premium above the closing price of Gemalto’s stock on Dec. 8. It also said the deal will generate mid to high-teens earnings accretion in the first year after it closes.

The boards of both companies have approved the acquisition.

Thales’ financial advisers on the deal are LazarMessier Maris & Associes, and Societe Generale.Deutsche Bank and J.P. Morgan are advising Gemalto.