Hitachi to acquire Finmeccanica's rail operations

Japanese multinational firm Hitachi Ltd. announced yesterday that it had signed an agreement to acquire the rail business portion of Italian engineering firm Finmeccanica S.p.A. The purchase price is estimated to exceed $2 billion.

The deal includes Finmeccanica's rail business, which operates under the name AnsaldoBreda S.p.A., and Finmeccanica's entire interest in Ansaldo STS. The transaction is expected to close later this year, subject to such customary closing conditions as regulatory and antitrust approvals.

AnsaldoBreda provides mass transit vehicles and very high-speed trains. The company built light-rail vehicles for the San Francisco Municipal Transportation Agency. Ansaldo STS designs, implements and manages signaling equipment and control systems for freight and passenger railroads.

The deal is a key milestone in Hitachi Rail's strategy to become a global leader in total rail solutions, Hitachi officials said in a press release.

“This acquisition complements [our] strategy to grow our Social Innovation Business, combining IT technology with our sound infrastructure solutions,” said Hiroaki Nakanishi, chief executive officer of Hitachi, which has constructed high-speed trains for rail systems in Japan, Taiwan and the United Kingdom.

If the China CNR Corp. were to make a counter-offer for the businesses, Finmeccanica CEO Mauro Moretti told Reuters that “it will be discussed,” although he didn’t foresee such a bid happening.

The deal is expected to cut Finmeccanica’s debt by approximately $681 million.