Finmeccanica to sell rail firms to Japan for $2bn

Hitachi said on Tuesday it would buy the rail and traffic signal businesses of Italy's Finmeccanica, in a deal that could reach more than $2.0 billion as it looks to take on global rail giants.

Finmeccanica to sell rail firms to Japan for $2bn
Finmeccanica has agreed to sell its rail car unit AnsaldoBreda and Ansaldo STS, reports said. Photo: Finmeccanica

The Japanese industrial conglomerate said it would pay €773 million ($875 million) for the Italian firm's 40 percent stake in Ansaldo STS, the world's number two traffic signal company, and €36 million for struggling rail car unit AnsaldoBreda. Hitachi said it would also bid for the remaining shares of Milan-listed Ansaldo STS that Finmeccanica does not already own.

Japanese media earlier reported that the deal, which is expected to be closed later this year, could top $2.0 billion.

Hitachi, which fell 0.77 percent to finish at 828.2 yen in Tokyo, is looking to boost its global operations after its key nuclear unit took a hit following the 2011 Fukushima nuclear crisis.

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 leading Nikkei business daily reported earlier on Tuesday.

Last week a consortium, including Hitachi and Japan's top heavy machinery maker Mitsubishi Heavy Industries, struck a $3.36 billion deal to build Qatar's first subway system.

"The acquisitions represent a key milestone in Hitachi Rail's strategy to become a global leader in total rail solutions," Hitachi and Finmeccanica said in a joint statement.

"The businesses acquired are strategically important for Italy and the combination with Hitachi will also provide a unique opportunity to pursue untapped growth potential in new markets."

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.

The purchase 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.

Genoa-based Ansaldo STS, which had sales of €1.3 billion last year, has about 4,000 employees in more than 30 countries. Naples-headquarted AnsaldoBreda has about 2,300 employees and makes a range of trains including those for subways and high-speed routes. It is supplying a fleet of driverless trains for Milan's metro.

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Italy quashes crash conviction for ex-rail boss

Italy's highest court on Friday quashed the manslaughter conviction of the former head of the Italian railways over a freight train disaster that killed 32 people in 2009.

Italy quashes crash conviction for ex-rail boss
People watch the site where two gas-filled rail tankers exploded after derailing overnight on June 30, 2009 in the seaside resort of Viareggio, northern Italy. Photo: STR/AFP
It sent the case back to the appeals court, ordering new trials for rail chief Mauro Moretti and another top executive, Michele Mario Elia.
A freight train carrying liquid petroleum gas derailed and exploded on June 29, 2009, while transiting through the Tuscan seaside town of Viareggio.
The force of the blast brought down two small blocks of flats where many of the victims lived, in Italy's deadliest rail accident in more than 30 years.
Rail chief Mauro Moretti, former chief executive of the defence group Leonardo, was sentenced to seven years in prison in 2017. Photo: Giuseppe Cacace/AFP
Moretti, a former boss of defence group Leonardo, was sentenced in 2017 to seven years for manslaughter and causing multiple injuries.
Elia was originally jailed for seven years and six months, although this was reduced at appeal to six years.
The court on Friday ruled the manslaughter charges had now lapsed under the statute of limitations and the new trial would only focus on allegations of negligence.
Moretti was held partly responsible for poor infrastructure and risk-avoidance systems which were deemed to have contributed to the derailing.   
He was tried with around 30 other defendants, including several other state-owned railway executives.