Hitachi to invest in U.S. software developer GlobalLogic for $9.6 billion

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

TOKYO (Reuters) -Hitachi Ltd claimed on Wednesday it will invest in U.S. computer software company GlobalLogic Inc for $9.6 billion, like repayment of personal debt, as the Japanese industrial conglomerate pivots from electronics components to electronic services.

FILE Photo: The brand of Hitachi is viewed at an office environment creating in Zurich, Switzerland September 10, 2020. REUTERS/Arnd Wiegmann

The offer is the largest Japanese outbound acquisition of a U.S. hello-tech corporation on document, according to Refinitiv information.

The acquisition is element of Hitachi’s ongoing small business portfolio overhaul, which involves the $7 billion acquisition of ABB Ltd’s ability grid business past yr and a series of divestitures of its domestic components subsidiaries.

Hitachi’s stock tumbled 7% on the Tokyo Inventory Trade, its sharpest each day slide in a lot more than a yr, on the news.

San Jose-based GlobalLogic is presently owned 45% every single by Canada Pension Prepare Financial commitment Board and Swiss financial commitment organization Associates Group. The relaxation is owned by the company’s administration.

Launched in 2000, GlobalLogic has much more than 20,000 staff in 14 countries and gives software engineering companies to 400 lively purchasers in industries which include automotive, health care, and finance.

GlobalLogic’s knowledge stretches from chips to cloud solutions and will lengthen the array of Hitachi’s possess digital expert services business, corporation executives instructed a news conference.

Previous GlobalLogic assignments consist of performing with McDonald’s on its purchaser app and in-store electronic ordering technique and with chipmaker Qualcomm on a fingerprint recognition program, according to its site.

Hitachi aims to close the transaction, which will be funded with funds and bank loans, by the finish of July.

The conglomerate is in talks with non-public equity firms to promote Hitachi Metals Ltd, a deal that could fetch far more than $6.4 billion, next the sale of its chemical device and diagnostic imaging business.

Reporting by Makiko Yamazaki Modifying by Kim Coghill