HITACHI Rail completed the $US 1.66bn acquisition of Thales’ Ground Transportation Systems (GTS) on May 31. The deal was originally announced in August 2021, but was delayed after several European countries raised concerns over the loss of competition. As a result, Hitachi divested parts of its existing signalling business in Britain, France and Germany in January this year.

The acquisition of GTS gives Hitachi a significant presence in the global signalling market, placing it as a top-tier supplier. When originally announcing the deal, the company said it would drive growth in its global railway signalling business, bringing an enhanced turnkey offering to new markets around the world and accelerating development of its Mobility as a Service (MaaS) offer.

In financial terms, the transaction substantially boosts Hitachi Rail’s revenue. Total revenue of the two combined companies equates to €7.3bn for the 2023 financial year. Staff numbers are also significantly up - around 9,000 employees join Hitachi from GTS, giving Hitachi Rail a global workforce of 24,000.

Hitachi signalling products and services now extend over 26,000km of mainline railway and 4600km of metros around the world. The acquisition of GTS significantly reshapes Hitachi from its previous core activity as a rolling stock manufacturer to a signalling systems supplier, with the latter now accounting for around 60% of revenue. Hitachi points out that the returns on signalling are typically higher than on rolling stock.

Hitachi Rail’s key locations in Japan, Italy, Britain and the United States are strategically complemented by major GTS centres in Germany, France, Spain and Canada. Both businesses have an established reputation in the wider European market, the Middle East and Asia-Pacific.

Hitachi will continue to develop the rolling stock side of its business and is looking to supply both ETR1000 high-speed and battery trains to European markets such as Germany, where it has historically not been active.

“With Thales’ Ground Transportation Systems team onboard, we can better deliver the sustainable mobility transition for the world’s best transport companies,” says Mr Giuseppe Marino, group CEO of Hitachi Rail. “Bringing our teams together sees our engineering capacity nearly double and means faster innovation and more advanced technology-led solutions for our customers.”