Hitachi Rail Acquires Thales’ Ground Transportation Systems for €1,660m

Author photo: Chantal Polsonetti
ByChantal Polsonetti
Category:
Acquisition or Partnership

Hitachi Rail announced the completion of its €1,660m acquisition of Thales’ Ground Transportation Systems (GTS) business, expanding its global presence to 51 countries with most of its revenues now coming from higher return signaling and systems.  The closing is designed to strengthen Hitachi Rail company’s strategic focus on helping current and potential Hitachi Rail and GTS customers through the sustainable mobility transition – the shift of people from private to sustainable public transport, driven by digitalization.

Ground Transportation 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) FY23 pro-forma. 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 signaling and systems division post-transaction (around 60%). The business’ signaling will operate over 26,000km of mainline railway and 4,600km of urban metros around the world.

The acquisition enhances the company’s full portfolio of transport solutions with expertise in rolling stock, urban turnkey railways, mainline digital signaling, freight signaling, and communication and supervision systems.

Hitachi Rail’s key locations in Japan, Italy, the UK and the US are strategically complemented by GTS’ large centers 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 closing brings Hitachi Rail to 24,000 employees worldwide. The transaction almost doubles Hitachi Rail’s engineering capability and increases investment in innovation to provide an enhanced digital product offer, spanning signaling, ticketing, operations and cyber security solutions. The company has established a new Agile Innovation team and will combine the expertise of GTS’ five global Digital Hubs & Competence Centers and the digital strength of Hitachi’s Group companies. The new business is also poised to achieve greater cost competitiveness, including improving the effectiveness of procurement, optimizing engineering capabilities and investment in R&D.

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