(Writes through with industry background, Orange backs deal)
* Latest chapter in emblematic computing brand's history
* Offer is 30 pct premium to 3 month average share price
* Targets fast-growing cloud computing market
* Major shareholders on board
By Andrew Callus and Gwénaëlle Barzic
PARIS, May 26 (Reuters) - Atos plans to buy fellow French IT services firm Bull to strengthen its position in the fast-growing cloud computing services sector in the latest rebirth for a brand which recalls the earliest days of computer electronics.
At 4.90 euros a share for a total of 620 million euros ($845 million), the agreed takeover bid announced on Monday represents a 30 percent premium to the three-month weighted average share price of Bull, once known as Compagnie des Machines Bull. The deal would also boost Atos' presence in cybersecurity, another high-growth segment.
The combination is expected to deliver some 80 million euros annually in cost savings within two years, equivalent to almost a third of Atos' net profit last year.
Currently ranked fifth and 10th respectively in Western Europe's cloud computing services sector, a combined Atos-Bull would lie second by revenue behind Amazon and ahead of Microsoft and IBM, according to a presentation on Atos web site.
It would also consolidate Atos' claim to be the number one among Europe-based providers in cloud, IT security and so-called Big Data. Big Data refers to the analysis of vast troves of corporate and customer data, typically to glean marketing insights that help drive sales.
Cloud computing is the organisation and storage of data over the Internet as an alternative to computer hard-drives, allowing large and small customers to rent capacity as needed rather than having to own and maintain complex systems themselves.
Founded in the 1930s, Bull was a major competitor of IBM in the 1950s and 1960s with its famed Gamma machines. Its ownership has changed hands several times since the days when it was a major force in mainframe computers. Nationalised, and later re-privatised by the French government in the 1990s, the group then came close to bankruptcy after a belated expansion into personal computers with the purchase of Zenith Data Systems.
Today it is also a niche player in the defence sector with contracts around the world.
Atos was formed from the merger of Atos with Origin in 2000 and bulked up with the acquisitions of KPMG Consulting and Siemens IT Solutions and Services. It is headed by Thierry Breton, a former French finance minister.
A presentation slide outlining the deal showed the cloud services market growing at a compound annual rate of between 25 and 50 percent a year.
Analysts at brokerage Kepler Cheuvreux said the relatively low valuation multiple for Bull, giving it an enterprise value of 9 times earnings before interest, tax, depreciation and amortisation, reflected its status as a "serial disappointer", while Atos' record on acquisitions was a good one and so "we see some rationale in the transaction".
Bull shares leapt to match the offer price on Monday, 22 percent above Friday's close. Atos shares climbed 4 percent to 63 euros a share.
Atos, more than nine times larger than Bull by market value based on the offer price and Atos' closing value on Friday, said the deal would enhance its IT service offerings in manufacturing, healthcare and the public sector, and would reinforce its footprint, mainly in France, but also in places such as Iberia, Poland, Africa and Brazil.
"Bull will bring critical and complementary capabilities in big data which, combined with Atos solutions, will create a unique offering in this high-growth segment," it said.
Bull's main shareholders, Crescendo Industries and Pothar Investments, with some 24.2 percent, have already committed to tender their shares, the Atos announcement said. Orange , France's top telecoms provider and owner of 8 percent of Bull, said in a separate statement that the offer was "both interesting and constructive".
Atos is also in a battle to acquire another French IT services group, Steria. Steria has accepted a bid from rival Sopra and rejected Atos' 22 euro per share proposal. A spokesman for Atos said the Bull deal did not change its offer for Steria, which remains on the table until Sopra's annual meeting on May 27. ($1 = 0.7336 euros) (Additional reporting by Gilles Guillaume and Eric Auchard; editing by Tom Pfeiffer)