WSJ: Hitachi to Buy Finmeccanica Train, Signaling Units
WSJ (excerpts): Hitachi Ltd. , moving to expand its transportation business overseas, Tuesday signed a binding agreement to buy two units from Finmeccanica for about $1 billion as the Italian company looks to lower debt and concentrate on its core aerospace and defenses businesses.
Hitachi will pay €773 million ($876.1 million) for Finmeccanica’s 40% stake in rail signaling operator Ansaldo STS and €36 million for unprofitable train manufacturer AnsaldoBreda, the two companies said in a statement. Following the closing of the deal, expected by the end of the year, Hitachi will launch a mandatory tender offer on Ansaldo STS’s publicly traded shares which could boost the Japanese company’s total payout to as much as $2.5 billion.
After restructuring to scale back its consumer electronics business, the Japanese conglomerate has been pushing to expand abroad, in areas ranging from train building to power-generation equipment to reduce its reliance on its slow-growing domestic market. The company moved the headquarters of its rail division to London from Tokyo last year after winning an order to supply high-speed trains in Britain.
“We will keep the current employees and factories of AnsaldoBreda and we will utilize those of Ansaldo STS,” said Hiroaki Nakanishi , chairman and chief executive of Hitachi. “As for the current management of the Italian companies, our first priority is to utilize the current structure.”
Those words did little to assuage Italy’s largest union, Cgil, which called for “a meeting with the government to discuss the possibility of blocking the sale to protect jobs and one of the country’s strategic industries.”
Cgil’s metalworkers union, Fiom, called a meeting for Feb. 27 to discuss what steps to take and also demanded Finmeccanica release all the information regarding a rival offer from Insigma Group of China that the Italian company had been considering....
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