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

By Makiko Yamazaki, Sam Nussey FILE Photograph: The logo of Hitachi is noticed at an

FILE Photograph: The logo of Hitachi is noticed at an business making in Zurich, Switzerland September 10, 2020. REUTERS/Arnd Wiegmann

TOKYO (Reuters) – Hitachi Ltd mentioned on Wednesday it will buy U.S. software program business GlobalLogic Inc for $9.6 billion, which includes repayment of personal debt, as the Japanese industrial conglomerate pivots from electronics components to digital services.

The acquisition is aspect of Hitachi’s ongoing enterprise portfolio overhaul, which features the $7 billion acquisition of ABB Ltd’s electricity grid company final year and a sequence of divestitures of its domestic components subsidiaries.

Hitachi’s stock tumbled 7% on the Tokyo Inventory Trade – the major tumble in extra than a yr – on the large ticket deal.

San Jose-based mostly GlobalLogic is now owned 45% each and every by Canada Pension Strategy Expense Board and Swiss financial commitment agency Companions Team. The rest is owned by the company’s management.

Founded in 2000, GlobalLogic has extra than 20,000 workers in 14 international locations and features application engineering expert services to 400 active consumers in industries which include automotive, health care, and finance.

GlobalLogic’s knowledge stretches from chips to cloud expert services and will increase the vary of Hitachi’s individual digital companies organization, firm executives advised a information conference.

Previous GlobalLogic jobs involve doing work with McDonald’s on its purchaser app and in-store digital buying process and with chipmaker Qualcomm on a fingerprint recognition procedure, in accordance to its internet site.

Hitachi aims to close the transaction, which will be funded with dollars and lender financial loans, by the conclusion of July.

The conglomerate is in talks with private equity companies to sell Hitachi Metals Ltd, a deal that could fetch additional than $6.4 billion, next the sale of its chemical device and diagnostic imaging small business.

Reporting by Makiko Yamazaki Enhancing by Kim Coghill