The combined strength of Hitachi and the digital expertise of Ground Transportation Systems will help Hitachi Rail fast track its entry into the MaaS segment

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Hitachi Rail to acquire Thales’ GTS business. (Credit: Hitachi Rail Limited)

French defence electronics company Thales has agreed to sell its Ground Transportation Systems (GTS) business to Hitachi Rail for €1.66bn.

The GTS business is a rail technology provider, which has headquarters in Germany, France, and Canada. It is engaged in providing rail signalling and train control systems, fare collection solutions, and telecommunications and supervision systems.

The business had nearly 9,000 employees across 42 countries at the end of last year. It had posted revenues of €1.6bn in 2020.

It is made up of four segments, which include mainline railroad signalling systems, integrated communication systems, urban rail signalling, and revenue collection systems. Nearly 50% of the GTS business is engaged in digital offerings.

The combination of Hitachi Rail and GTS will result in a major rail signalling provider with a larger product offering and stronger capabilities to address customer demand globally.

Furthermore, the combined strength of Hitachi and GTS’ digital expertise will help Hitachi Rail to expedite its foray into the mobility as a service (MaaS) segment.

The deal will give GTS’ customers access to Hitachi’s Lumada digital solutions and services along with GlobalLogic’s digital capability. GlobalLogic, which is a US-based digital product engineering services company, was acquired by Hitachi in a $9.6bn deal.

Hitachi Rail CEO Andrew Barr said: “Not only will we grow the reach of our core signalling capabilities as part of our turnkey offering, but we are also bringing together our digital and Mobility as a Service capabilities.

“The strong teams, customer relationships and technologies at GTS will help us grow to become a major player, further enabled by Lumada and the digital engineering of our teams at GlobalLogic and the broader Hitachi Group.”

For Thales, the sale of the GTS unit will enable it to strengthen its focus on the high technology growth markets of aerospace, defence and security, and digital identity and security.

Thales strategy, research and technology EVP Philippe Keryer said: “After discussions with key market players, Thales has selected the best industrial partner to ensure a successful long term development of its ground transportation business.

“This move is creating significant value for our clients, employees and shareholders and enables Ground Transportation Systems to be at the forefront of growth in sustainable mobility.”

The deal, which is subject to regulatory and antitrust clearances, and other usual conditions, is expected to close by the end of calendar year 2022 / early in calendar year 2023.