Hitachi Rail to Buy Thales Business for €1.6b

With the impending sale of its Ground Transportation Systems business, the major tech company refocuses its attention on three high technology growth markets.

By Joel Davies -

Thales and Hitachi Rail have entered into exclusive negotiations on the sale of Thales’s Ground Transportation Systems Global Business Unit (Ground Transportation Systems) for an enterprise value of €1,660 million. Through the transaction, Thales reinforces its strategic focus on three long-term high technology growth markets, namely: Aerospace, Defence & Security, and Digital Identity & Security.

Thales is a major player in advanced technologies, investing in digital and “deep tech” innovations including connectivity, big data, artificial intelligence, cybersecurity and quantum computing. The company applies its solutions in the defence, aeronautics, space, transport, digital identity and security sectors for businesses, organisations and governments.

Patrice Caine, Chairman and CEO of Thales said, “With this major strategic move, we will be able to focus on the development of our 3 high-tech long-term growth businesses, each of them able to sustainably deliver double-digit margins — Aerospace, Defense & Security, and Digital Identity & Security — further strengthening their best-in-class market position”.

The Ground Transportation Systems business provides Rail Signaling and Train Control Systems, Telecommunications and Supervision systems and Fare collection solutions for around eight billion passengers a year. Ground Transportation Systems employed 9,000 workers at the end of 2020. The business also delivered its best financial performance of the past 7 years through 2020 and H1 2021 in spite of the Covid-19 crisis.

Now, Hitachi Rail seeks to take over the business which Thales says “thanks to the strong technical, geographical and commercial complementarities between Hitachi Rail and Ground Transportation Systems, the combination will create a leading rail signalling provider with a broader product offering and stronger capabilities to meet customer demand around the world”.

Thales Hitachi Rail
Patrice Caine, Chairman and CEO of Thales. Image: Thales.

“Today’s announcement marks an exciting opportunity for the teams at Hitachi Rail and Thales’s Ground Transportations Systems business to create new value for our customers, cities and passengers around the world”, stated Andrew Barr, Chief Executive Officer, Hitachi Rail. “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 MaaS 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”.

Employee representatives of both Thales and Hitachi Rail will be informed and consulted on the project according to the laws of the involved countries. The completion of the transaction will require the carve-out of the business in several countries and is subject to usual conditions including regulatory and antitrust clearances. It is expected to close by the end of the calendar year 2022 or early in the calendar year 2023.

You can find more information about the sale of the Ground Transportation Systems Global Business Unit by Thales to Hitachi Rail on the companies’ respective websites.

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