Thales, Hitachi Rail Enter Negotiations on Thales Ground Transportation Systems Business
Wednesday, August 04, 2021 | Comments

Thales and Hitachi Rail entered into exclusive negotiations on the sale of Thales’s Ground Transportation Systems (GTS) global business unit for an enterprise value of 1,660 million euros.

With around 9,000 employees at the end of 2020, GTS is a provider of rail signaling and train control systems, telecommunications and supervision systems and fare collection solutions, key technologies for a more sustainable mobility. Around 8 billion passengers benefit from GTS’ rail technologies every year.

Thanks to the engagement of GTS employees and, more globally, of Thales’s management team, the business achieved a remarkable turnaround over the past five years, delivering in 2020 and the first half of 2021, its best financial performance of the past seven years, in spite of the COVID-19 crisis, the company said.

Because of the strong technical, geographical and commercial complementarities between Hitachi Rail and GTS, the combination will create a leading rail signaling provider with a broader product offering and stronger capabilities to meet customer demand around the world. In addition, it will offer GTS employees enhanced professional opportunities. The combined strength of Hitachi and GTS’ digital expertise will also help Hitachi Rail to accelerate its mobility as a service (MaaS) offering.

“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,” said Philippe Keryer, executive vice president strategy, research and technology, Thales. “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.”

Employee representatives of both Thales and Hitachi Rail will be informed and consulted on this project according to the laws of 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 calendar year 2022 or early in calendar year 2023.

“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,” said Hitachi Rail CEO Andrew Barr. “Not only will we grow the reach of our core signaling 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.”

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