Hitachi to acquire U.S. software firm GlobalLogic for $9.6 bil.

Hitachi Ltd. said Wednesday it will fully acquire U.S. software engineering firm GlobalLogic Inc. for $9.6 billion to boost its information technology business in overseas markets.

Hitachi to acquire U.S. software firm GlobalLogic for $9.6 bil.

With the deal, the Japanese industrial conglomerate is aiming to globally accelerate digitalization in its railway, energy, health care and other businesses. It plans to complete the acquisition of the California-based firm by the end of July pending regulatory approval.

“We will speed up our IT business on a global basis and provide new values to our clients,” Hitachi CEO Toshiaki Higashihara said in an online press conference, adding the acquisition will bring synergies to the company’s domestic IT solution business.

GlobalLogic, founded in 2000, is offering system solutions to over 400 clients in various sectors including automakers and telecommunications and employs more than 20,000 people in 14 countries.

Its sales for 2021 are estimated at around $1.2 billion, according to Hitachi.

To finance the acquisition, Hitachi will spend 200 billion yen ($1.8 billion) in cash on hand. It will borrow from banks and issue bonds to raise the remainder of necessary funds.

Hitachi has been focusing on IT-related and infrastructure businesses, having bought an 80.1 percent stake in the power grid business of Swiss engineering group ABB Ltd. for around 740 billion yen last year, while selling its entire stake in chemical unit Hitachi Chemical Co. to Showa Denko K.K.

The Japanese company has set up its business strategy to invest some 1 trillion yen to boost its IT-related business in its medium-term business plan through March 2022.

Originally published at Kyodo news