Hitachi Rail

Japanese conglomerate Hitachi has completed the acquisition of rail transport engineering firm AnsaldoBreda and a 40% stake in signalling supplier Ansaldo STS from Italy-based Finmeccanica.

The deal excludes a number of revamping activities and residual contracts of AnsaldoBreda.

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Hitachi paid €30m for the acquisition of AnsaldoBreda.

For Finmeccanica’s 40% stake in Ansaldo STS, the Japanese major has paid €761m, at €9.50 a share.

Hitachi will now launch a mandatory offer to buy all the remaining shares in Ansaldo STS from other shareholders, in accordance with the Italian law.

The acquisition of shares in rail signal system unit would help Hitachi to sell combined carriage and signal packages, as well as offer a manufacturing presence in Europe.

"I am sure both AnsaldoBreda and Ansaldo STS will play a key role in the future development of Hitachi Rail business worldwide."

Finmeccanica noted that the integration of its transportation business into Hitachi will secure the best possible future for both Ansaldo STS and AnsaldoBreda businesses and their employees.

The Italian firm decided to sell its assets in order to cut the €4.8bn ($6.1bn) debt and focus on its aerospace and defence businesses.
These acquisitions will bring down Finmeccanica Group’s net debt by around €600m, with a capital gain preliminarily estimated at about €250m, by the end of this year.

Finmeccanica CEO and general manager Mauro Moretti said: "With the sale of the transportation business, Finmeccanica becomes a pure aerospace, defence and security player.

"This is a key step in the execution of our industrial plan, aimed at focusing and strengthening the group in the core business and at delivering on our economic and financial objectives.

"I am sure both AnsaldoBreda and Ansaldo STS will play a key role in the future development of Hitachi Rail business worldwide."

Last November, Hitachi submitted a bid for acquisition, after Finmeccanica shortlisted Hitachi and China’s CNR Corporation for the sale.

Hitachi Rail Group global CEO Alistair Dormer said: "With these acquisitions, Hitachi will strengthen its position in signalling and traffic management systems, expand turnkey operations and enlarge its portfolio with world-class products.

"The combination of Ansaldo and Hitachi’s complementary portfolios will also deliver a unique opportunity to pursue untapped growth potential in new markets."

In September, Hitachi had opened its first rail manufacturing facility outside Japan in Newton Aycliffe, County Durham, UK, to manufacture InterCity Express (IEP) trains.

The £82m facility is the result of a £5.7bn Intercity Express contract awarded by the UK Government to the manufacturer a few years ago.

Image: Hitachi Rail Group Global CEO Alistair Dormer and Finmeccanica CEO and general manager Mauro Moretti at the closing of the transaction. Photo: courtesy of Hitachi Rail Group.