Hitachi Rail has completed the acquisition of Thales GTS (Ground Transportation Systems) today. A deal valued at €1.66 billion makes the Japanese firm one of the world leaders in railway signalling.
The deal is part of a cycle of organic growth and acquisitions that enables Hitachi Rail to reach its annual revenue target of more than 1 trillion yen (about 5.9 billion euros).
According to the company, Hitachi Rail’s key locations in Japan, Italy, the UK and the US are strategically complemented by GTS’s large sites in Germany, France, Spain and Canada. Both companies have an established reputation in the European, Middle East and Asia-Pacific markets.
Completing the acquisition of Thales GTS brings the number of highly skilled professionals within the company to 9,000, bringing Hitachi Rail’s global workforce to 24,000.
The acquisition of Thales GTS, a process completed in three years
Pending completion of the integration, which is already underway, today marks the end of a process that began in April 2021 when Thales announced the sale of its subsidiary GTS. One of the objectives of this operation is to focus on the aerospace business.
While one of the finalists in selecting a buyer was Spain’s CAF, in August 2021 Thales chose Hitachi Rail. Since then, the acquisition of Thales GTS has required the receipt of all permits and the fulfilment of commitments. One of the milestones of the acquisition was the sale to MERMEC of the part of the business that the competition authorities had to sell to clear the deal.
Hitachi President and CEO Keiji Kojima said: “Hitachi continues its transformation to become a global leader in the Social Innovation business and is undergoing a mode shift to achieve growth under the 2024 Medium-Term Management Plan. The acquisition of Thales GTS represents a significant milestone, and we are pleased to have achieved it in the final year of the plan.
“By welcoming new colleagues from Hitachi Rail, Hitachi’s rail systems business has strengthened its global market presence. Hitachi will enhance its digital services by leveraging IT, OT, and products across an expanded installed base in the mobility space, and solve global societal challenges through co-creation with customers. 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.”
Giuseppe Marino, CEO of Hitachi Rail Group, said:
“The completion of this transaction is a historic moment for our business as we expand to 51 countries and increase our revenue to €7.3 billion globally [pro forma FY23]. Hitachi Rail’s increased global reach and accelerated innovation marks the start of an exciting new chapter that will deliver enhanced value and growth in new markets.
“With the Thales Land Transportation Systems team on board, we can better deliver the transition to sustainable mobility for the world’s best transportation companies. Bringing our teams together means our engineering capabilities will nearly double and means faster innovation and more advanced technology solutions for our customers.”
