French defence firm Thales has snapped up dutch cyber security firm Gemalto in a deal worth £4bn.
The world's biggest maker of SIM cards had last week turned down an offer from another French firm, Atos, deeming the €46 a share offer as undervaluing the company.
Thales has made an all cash offer of €51 per share, a 57 per cent premium over its 8 December closing price.
Thales chairman and chief executive Patrice Caine said the acquisition marks a "key milestone" in the firm'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. Our project will be beneficial to innovation and employment, whilst respecting sovereign strategic technologies."
Gemalto chief executive Phillipe Vallee said the deal was "the most promising option" for the company and it has been recommended to shareholders by the board.
Gemalto has issued three profit warnings in six months amid a global slowdown in smartphone demand. A third of its business comes from SIM cards.