Hitachi Rail to acquire Thales signaling business in a deal worth US$2 billion

Hitachi Rail will acquire Thales’ Ground Transportation Systems (GTS) business in an approximate US$2-billion deal that the companies anticipate will close in late Fiscal Year 2022, subject to regulatory and antitrust clearances.

“After discussions with key market players, Thales has selected the best industrial partner to ensure a successful long-term development of its ground transportation business. This move is creating significant value for our clients, employees and shareholders and enables Ground Transportation Systems to be at the forefront of growth in sustainable mobility,” said Thales Executive Vice President Strategy, Research and Technology Philippe Keryer.

Hitachi Rail expects the acquisition to drive growth by expanding the scale of its rail signaling systems business globally, bringing an enhanced turnkey railway offering to new markets around the world. The combined business will be positioned to become a global leader in the rail signaling market. The combined strength of Hitachi and GTS’s Digital expertise will also help Hitachi Rail to accelerate its Mobility-as-a-Service (MaaS) offering for a global customer base.

"Today’s announcement marks an exciting opportunity for the teams at Hitachi Rail and Thales’ Ground Transportation Systems business to create new value for our customers, cities and passengers around the world. Not only will we grow the reach of our core signaling capabilities as part of our turnkey offering, but we are also bringing together our digital and Mobility as a Service capabilities. The strong teams, customer relationships and technologies at GTS will help us grow to become a major player, further enabled by Lumada and the digital engineering of our teams at GlobalLogic and the broader Hitachi Group,” said Hitachi Rail CEO Andrew Barr.

With the complementary strength of GTS’s signaling activities, and rapid growth in MaaS and digitization in the rail sector, GTS will help Hitachi Rail to potentially reach US$9.12 billion revenue and double-digit adjusted operating income ratio around four years from closing in FY2026.

Hitachi Rail says the GTS business consists of four segments: mainline railroad signaling systems, urban rail signaling, integrated communication systems and revenue collection systems. Around 50 percent of the GTS business is dedicated to digital offerings and the company employs a wealth of digital talent in the mobility sector.