Hitachi Rail acquires Thales’ Ground Transportation Business for €1.66 Billion

London, United Kingdom (Urban Transport News): Hitachi Rail has successfully completed its €1.66 billion acquisition of Thales’ Ground Transportation Systems (GTS) business, significantly expanding its global presence and revenue potential. This strategic move places Hitachi Rail at the forefront of the global mobility sector, enhancing its capabilities in digital signaling and systems, which now account for the majority of its revenues.

With this acquisition, Hitachi Rail has extended its reach to 51 countries, underscoring its commitment to sustainable growth and digital transformation. The company’s strategic locations in Japan, Italy, the UK, and the US are now complemented by GTS’s major centers in Germany, France, Spain, and Canada. This expansion is part of Hitachi Rail’s broader strategy to support the sustainable mobility transition, which encourages the shift from private to public transportation through digital innovations.

The combined revenues of Hitachi Rail and GTS have reached €7.3 billion for FY23 on a pro-forma basis, achieving Hitachi Rail’s long-standing goal of surpassing ¥1 trillion in annual revenues. This growth is supported by a significant shift in revenue profile, with approximately 60% now derived from high-return signaling and systems.

The acquisition nearly doubles Hitachi Rail’s engineering capacity, bringing the total number of employees to 24,000 worldwide. This bolstered workforce will enhance the company’s ability to deliver advanced technology solutions across a broader range of markets. Key areas of focus include:

• Rolling Stock and Urban Turnkey Railways: Providing comprehensive transportation solutions tailored to urban environments.
• Mainline and Freight Signaling: Enhancing safety and efficiency in rail operations.
• Communication and Supervision Systems: Integrating advanced IT and operational technologies to improve service delivery and passenger experience.

A cornerstone of this acquisition is the emphasis on digital innovation. Hitachi Rail has established a new Agile Innovation team, which will leverage the expertise from GTS’s five global Digital Hubs & Competence Centres. This team will drive advancements in signaling, ticketing, operations, and cybersecurity solutions. The enhanced digital product offerings are expected to provide superior service to Hitachi Rail’s customers, enabling faster and more efficient travel.

The acquisition aligns with Hitachi Group’s Mid-term Management Plan 2024, which emphasizes transformation through “Social Innovation Business.” Hitachi President and CEO Keiji Kojima highlighted the significance of this acquisition in achieving the group’s goals:

“By welcoming new Hitachi Rail colleagues, Hitachi's Railway systems business has strengthened its presence in the global market. Hitachi will enhance its digital services by leveraging IT, OT, and products on an expanded installed base in the mobility arena, and solve global social 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, Group CEO of Hitachi Rail, expressed his enthusiasm for the future:

“Completing this transaction is a historic moment for our business, as we expand to 51 countries and increase our revenues to €7.3bn globally [FY23 pro forma]. Hitachi Rail’s greater global reach and accelerated innovation is the start of an exciting new chapter that will deliver enhanced value and growth in new markets. With Thales’ Ground Transportation Systems team on board, we can better deliver the sustainable mobility transition for the world’s best transport companies. Bringing our teams together sees our engineering capacity nearly double and means faster innovation and more advanced technology-led solutions for our customers.”

Hitachi Rail’s acquisition of Thales’ Ground Transportation Systems represents a pivotal moment in the company’s history, reinforcing its position as a global leader in the rail industry. The strategic expansion and enhanced capabilities are set to drive significant advancements in digital and sustainable transportation solutions. This move not only aligns with Hitachi Group’s broader vision of social innovation but also promises to deliver substantial benefits to customers and communities worldwide.