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Hitachi, Ltd. and Finmeccanica S.p.A. have announced that they have signed binding agreements for the sale and purchase of the current business of AnsaldoBreda S.p.A., with the exclusion of some revamping activities and certain residual contracts, and the entire interest owned by Finmeccanica in Ansaldo STS S.p.A., equal to approximately 40% of the share capital. The simultaneous closing of the transactions is expected later this year and is subject to certain customary conditions, such as regulatory and antitrust approvals.
The acquisitions represent a key milestone in Hitachi Rail's strategy to become a global leader in total rail solutions. Whilst significantly expanding its global footprint, the acquisitions will enable Hitachi to strengthen its position in signalling / traffic management systems, expand turnkey operations and enlarge its portfolio with world class products. The businesses acquired are strategically important for Italy and the combination with Hitachi will also provide a unique opportunity to pursue untapped growth potential in new markets.
Finmeccanica has selected Hitachi as the best industrial partner to ensure a successful long term repositioning of its transportation business, following a competitive process. The integration into Hitachi will secure the best possible future for the Ansaldo STS and AnsaldoBreda businesses and their employees, marking a fundamental step in executing the industrial plan of Finmeccanica, which becomes a pure aerospace, defence & security company. The transactions will result in a reduction of group net debt by approximately Eur 600 million and a net total capital gain of approximately Eur 250 million.
Ansaldo STS is a leading, world-class transportation systems technology company specializing in the design, implementation and management of signalling equipment and control systems for railways and underground railways in the freight and passenger market. Ansaldo STS also acts as a main contractor and supplier of "turnkey" transportation systems worldwide. Ansaldo STS is headquartered in Genoa and employs about 4,000 people (of which 1,530 in Italy) in more than 30 countries.
AnsaldoBreda has 150 years of experience in the industry and a strong tradition in the field of rail vehicles, with consolidated capabilities in mass transit and very high speed trains. It is headquartered in Naples and has presences in the USA and major projects globally.
The purchase price under the Ansaldo STS share purchase agreement is Eur 9.65 per Ansaldo STS share, resulting in a total consideration of Eur 773 million. The agreed purchase price is subject to a possible pre-closing downward adjustment in the event that Ansaldo STS approves any distribution of dividends, interim dividends or other distributions.
The total net consideration to be paid to Finmeccanica for the current business of AnsaldoBreda, including the real estate assets, amounts to Eur 36 million. Following close of the acquisitions, Hitachi will launch a mandatory tender offer on all remaining shares of Ansaldo STS in accordance with Italian law.
Keywords: Rail Vehicles, Signaling, Traffic Management, Transportation Business, ARC Advisory Group.