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Hitachi to buy Italian railways firms for over US$2b: media
[TOKYO] Hitachi will buy the rail and traffic signal businesses of Italy's Finmeccanica for an estimated US$2.1 billion, reports said Tuesday, as the Japanese firm looks to expand overseas and challenge major international railways firms.
The Italian defence and aerospace company has agreed to sell its rail car unit AnsaldoBreda and Ansaldo STS, the world's number two traffic signal company, to the vast Japanese conglomerate, according to reports by the leading Nikkei business daily and other major media.
The purchase is expected to be worth more than 250 billion yen (S$2.9 billion), with Finmeccanica set to announce the agreement as early as Tuesday, the top-selling Yomiuri newspaper said.
"It is true that we are negotiating with Finmeccanica over the railway businesses, but the reported agreement has not been announced by our company," a Tokyo-based Hitachi spokesman told AFP.
Shares in Hitachi fell 0.81 per cent to 827.9 yen on the Tokyo Stock exchange Tuesday morning following the news reports.
Hitachi and three other companies stepped forward as prospective buyers after Finmeccanica announced plans last summer to unload the two subsidiaries.
The Japanese firm came close to sealing a deal last November, but a subsequent offer from a Chinese company delayed Finmeccanica's final decision.
Under the reported deal, Hitachi plans to first acquire all shares held by Finmeccanica in the two companies and then make a tender offer to turn the Milan Stock Exchange-listed Ansaldo STS into a wholly owned subsidiary as well, the Nikkei said.
The Italian giant holds a roughly 40 per cent stake in Ansaldo STS.
It is the latest step in Hitachi's long-running pursuit of the two companies, with Italian media reporting in March 2012 that the conglomerate was interested in buying the firms.
The acquisition will push up Hitachi's annual rail-related sales to more than 400 billion yen - about half that of Canada's Bombardier, Siemens of Germany, or France's Alstom, the Nikkei said.
With the planned acquisition, Hitachi's rail operations, which have so far focused on Japan and Britain, will now go global and gain Italian rail car production facilities, the newspaper added.