Hitachi Rail has announced the completion of its €1,660m acquisition of Thales’ Ground Transportation Systems (GTS) business, expanding its global presence to 51 countries with the majority of its revenues now coming from higher-return signalling and systems.
The deal advances a cycle of organic growth and acquisitions that sees Hitachi Rail achieve its annual revenue goal of more than ¥1 trillion with the business’ combined revenues growing to €7.3 billion (¥1.1 trillion; USD $7.9 billion). It also supports the company’s profit growth by continuing the shift in its revenue profile, with the majority now coming from its higher-return signalling and systems division post-transaction (around 60%). The business’ signalling will operate over 26,000km of mainline railway and 4,600km of urban metros around the world.
Hitachi Rail’s key locations in Japan, Italy, the UK and the US are strategically complemented by GTS’ large centres in Germany, France, Spain and Canada – with both businesses having an established reputation in the wider European market, the Middle East and Asia-Pacific.
The transaction almost doubles Hitachi Rail’s engineering capability and increases investment in innovation to provide an enhanced digital product offer, spanning signalling, ticketing, operations and cyber security solutions.
“By welcoming new Hitachi Rail colleagues, Hitachi’s Railway systems business has strengthened its presence in the global market. Hitachi will enhance its digital services by leveraging IT, OT, and products on an expanded installed base in the mobility arena, and solve global social challenges through co-creation with customers,” says Hitachi President and CEO Keiji Kojima.
The deal marks a major step in Hitachi Rail’s parent company, Hitachi, Ltd.’s, long-running strategy to transform its businesses around the concept of “Social Innovation”. The Group has led a strategic programme to reshape its portfolio of companies around essential sectors delivering the infrastructure and technology that underpins the progress of sustainable societies.
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