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

By Makiko Yamazaki, Sam Nussey FILE Photo: The symbol of Hitachi is viewed at an

FILE Photo: The symbol of Hitachi is viewed at an business office building in Zurich, Switzerland September 10, 2020. REUTERS/Arnd Wiegmann

TOKYO (Reuters) – Hitachi Ltd reported on Wednesday it will acquire U.S. program enterprise GlobalLogic Inc for $9.6 billion, which includes compensation of debt, as the Japanese industrial conglomerate pivots from electronics components to electronic products and services.

The acquisition is part of Hitachi’s ongoing company portfolio overhaul, which involves the $7 billion acquisition of ABB Ltd’s power grid business enterprise past 12 months and a collection of divestitures of its domestic components subsidiaries.

Hitachi’s inventory tumbled 7% on the Tokyo Inventory Exchange – the most significant tumble in far more than a calendar year – on the massive ticket offer.

San Jose-based GlobalLogic is at this time owned 45% each by Canada Pension System Financial commitment Board and Swiss expenditure agency Companions Group. The rest is owned by the company’s administration.

Launched in 2000, GlobalLogic has extra than 20,000 employees in 14 nations around the world and delivers program engineering expert services to 400 lively clientele in industries including automotive, healthcare, and finance.

GlobalLogic’s skills stretches from chips to cloud products and services and will lengthen the vary of Hitachi’s individual digital companies small business, company executives informed a information meeting.

Past GlobalLogic projects involve performing with McDonald’s on its shopper application and in-retailer electronic purchasing program and with chipmaker Qualcomm on a fingerprint recognition process, according to its web-site.

Hitachi aims to shut the transaction, which will be funded with dollars and bank financial loans, by the conclude of July.

The conglomerate is in talks with personal fairness firms to sell Hitachi Metals Ltd, a offer that could fetch extra than $6.4 billion, following the sale of its chemical unit and diagnostic imaging business.

Reporting by Makiko Yamazaki Modifying by Kim Coghill