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It was announced aweek ago​ that Advent International, a private equity group, had entered into exclusive negotiations with Oberthur Group. The negotiations are focused on Advent investing to take a majority stake in Oberthur Card Systems - the part of Oberthur's business which focuses on smart cards for mobile/SIM, payment and banking, transportation, digital TV and contactless applications.

With a suggested investment of €1.15 billion, it is a question of what the strategy of Oberthur Card Systems businessnew owners will be. It is currently the second biggest manufacturer of smart cards, some way behind market leader Gemalto and slightly ahead of third placed Giesecke & Devrient. As a result, there are unlikely to be wholesale changes. And by splitting this part of the business from its traditional banknote printing business(which now has funds for acquisitions - De La Rue in the UK being a previous target) it presents two main options for the smart card unit.

Given the initial outlay, it is unlikely that there will be further significant acquisitions (at least in the short term). Perhaps the most likely route will be to develop more emphasis on software and services, something that Gemalto has successfully started to do over the past few years. This will give Oberthur the opportunity to build on its core expertise and to grow beyond the relatively commoditised pure smart card play, where price pressure has impacted significant volume growth over the past few years. Some of the building blocks are already there: Oberthur has a TSM capability for the nascent NFC/mobile market and it has good services and innovation in the payment card personalisation space. However, Oberthur has not always beenas proactive as it might inpromotingits capabilities in this respect. These are there to be built on and it will be interesting to watch if, how and when this push starts to grow the unit as a standalone business.

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