Hitachi Rail has announced the completion of its €1.6bn acquisition of Thales’ Ground Transportation Systems (GTS) business, expanding its presence to 51 countries worldwide.
The closing of the deal means that 9000 additional colleagues will join Hitachi Rail, taking the company’s workforce to 24,000. This almost doubles the company’s engineering capability and will enable an increase in innovation across signalling, ticketing, operations and cyber security solutions.
Giuseppe Marino, Group CEO of Hitachi Rail said: “Completing this transaction is a historic moment for our business, as we expand to 51 countries and increase our revenues to €7.3bn globally [FY23 pro forma]. Hitachi Rail’s greater global reach and accelerated innovation is the start of an exciting new chapter that will deliver enhanced value and growth in new markets.
“With Thales’ Ground Transportation Systems team on board, we can better deliver the sustainable mobility transition for the world’s best transport companies. Bringing our teams together sees our engineering capacity nearly double and means faster innovation and more advanced technology-led solutions for our customers.”
The creation of a new Agile Innovation team will combine the digital strength of Hitachi’s Group companies with the expertise from GTS’ five global Digital Hubs and Competence Centres. This collaboration will help to drive cost competitiveness, including improving the effectiveness of procurement, engineering capabilities and investment in R&D.
The deal is indicative of the long-running strategy of Hitachi, Ltd., Hitachi Rail’s parent company, to transform its businesses around the concept of “Social Innovation”. The Group has reshaped its portfolio of companies around essential sectors which deliver the infrastructure and technology that underpins progress in today’s world, including the energy transition, the digital AI revolution and the sustainable mobility transition.
Hitachi President and CEO Keiji Kojima said: “Hitachi continues its transformation to become a global leader in Social Innovation Business and is undergoing a mode change to achieve growth under the Mid-term Management Plan 2024. The acquisition of the Thales GTS business represents a significant milestone, and we are pleased to have achieved it in the final year of the plan.
“Through this acquisition and Hitachi’s overall growth, we will continue to support our customers' digital and green transformations and contribute to the realisation of a sustainable society.”
The takeover also means that the majority of Hitachi’s revenue will now come from higher-return signalling and systems and consolidates the company’s status in the global mobility sector.
The deal demonstrates Hitachi’s strategic focus on helping current and potential Hitachi Rail and GTS customers through the sustainable mobility transition, which represents a modal shift of people turning their back on private transport to sustainable modes of public transport.
GTS’ large centres in Canada, France, Germany and Spain complement Hitachi Rail’s key locations in Italy, Japan, the UK and the US, while both businesses already have an established reputation in the wider European market, Asia-Pacific and the Middle East.
Image credit: Hitachi Rail
