Hitachi to acquire U.S. software program developer GlobalLogic for $9.6 billion

By Makiko Yamazaki, Sam Nussey TOKYO (Reuters) -Hitachi Ltd stated on Wednesday it will purchase

TOKYO (Reuters) -Hitachi Ltd stated on Wednesday it will purchase U.S. software business GlobalLogic Inc for $9.6 billion, which includes compensation of financial debt, as the Japanese industrial conglomerate pivots from electronics components to electronic companies.

FILE Picture: The emblem of Hitachi is noticed at an office setting up in Zurich, Switzerland September 10, 2020. REUTERS/Arnd Wiegmann

The deal is the biggest Japanese outbound acquisition of a U.S. hello-tech company on record, according to Refinitiv facts.

The acquisition is aspect of Hitachi’s ongoing small business portfolio overhaul, which includes the $7 billion acquisition of ABB Ltd’s energy grid company previous yr and a collection of divestitures of its domestic components subsidiaries.

Hitachi’s stock tumbled 7% on the Tokyo Inventory Trade, its sharpest daily drop in a lot more than a calendar year, on the information.

San Jose-primarily based GlobalLogic is presently owned 45% just about every by Canada Pension Plan Investment decision Board and Swiss expenditure organization Companions Team. The rest is owned by the company’s management.

Started in 2000, GlobalLogic has additional than 20,000 staff members in 14 nations around the world and offers software engineering expert services to 400 energetic purchasers in industries together with automotive, health care, and finance.

GlobalLogic’s skills stretches from chips to cloud services and will prolong the selection of Hitachi’s possess electronic companies organization, organization executives informed a news conference.

Previous GlobalLogic projects include things like working with McDonald’s on its consumer application and in-keep digital ordering procedure and with chipmaker Qualcomm on a fingerprint recognition system, according to its web-site.

Hitachi aims to close the transaction, which will be funded with income and financial institution financial loans, by the conclude of July.

The conglomerate is in talks with personal equity companies to offer Hitachi Metals Ltd, a offer that could fetch far more than $6.4 billion, following the sale of its chemical device and diagnostic imaging small business.

Reporting by Makiko Yamazaki Enhancing by Kim Coghill