Hitachi looks to digital transformation of railways with Thales business unit acquisition
Hitachi Rail purchasing Thales’ Ground Transportation Systems business for approximately $2 billion
Japanese industrial heavyweight Hitachi Rail has entered into exclusive negotiations with French multinational Thales Group to purchase the former’s Ground Transportation Systems business unit with an initial enterprise valuation just less than $2 billion, a price that is subject to change as negotiations continue. The Hitachi Rail unit is looking to leverage “technical, geographical and commercial complementaries” between the two businesses with the acquisition, according to a statement from the companies.
Both companies provide rail signaling solutions to railway operators. Thales also sells train control systems, telecom and supervision systems, and fare collection solutions. According to Hitachi Rail, the combination, which is set to close next year, will expand the scale of the rail signaling business and bring “an enhanced turnkey railway offering to new markets…The combined strength of Hitachi and GTS’s digital expertise will also help Hitachi Rail to accelerate its [Mobility as a Service] offering for a global customer base.”
According to Hitachi, its primary markets are Japan, Italy, the U.K. and the U.S. while GTS primarily operates in Germany, France and Canada.
Hitachi Rail CEO Andrew Barr said in a statement, “Not only will we grow the reach of our core signaling capabilities as part of our turnkey offering, but we are also bringing together our digital and Mobility as a Service capabilities. The strong teams, customer relationships and technologies at GTS will help us grow to become a major player…”
Thales EVP of Strategy, Research and Technology Philippe Keryer said in a statement that the sale will “is creating significant value for our clients, employees and shareholders and enables [GTS] to be at the forefront of growth in sustainable mobility.”