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Hitachi to buy US IT firm GlobalLogic for $9.6 billion

Visitors crowd at a booth of Japanese electronics maker Hitachi Ltd. at an ecology fair in Tokyo, Japan. (AP/file)
Visitors crowd at a booth of Japanese electronics maker Hitachi Ltd. at an ecology fair in Tokyo, Japan. (AP/file)
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01 Apr 2021 12:04:46 GMT9
01 Apr 2021 12:04:46 GMT9

TOKYO: Japanese electronics giant Hitachi Ltd. said Wednesday that it will acquire US information technology firm GlobalLogic Inc. for an estimated 9.6 billion dollars in order to enhance its digital business abroad.

This will be one of the largest business acquisitions by Hitachi, which plans to complete the buyout by the end of July.

San Jose, California-based GlobalLogic has business bases in 14 countries, including the United States and India, offering services to support digitalization at companies. It has over 400 corporate clients.

“The acquisition is intended to accelerate our global expansion” of digital operations, Hitachi President and CEO Toshiaki Higashihara told an online press conference.

Hitachi aims to generate more than 50 pct of sales from its digital operations in overseas markets, up from the current 30 pct, by utilizing GlobalLogic’s technology, human resources and clients.

As part of its ongoing business consolidation, Hitachi has been strengthening its earnings through digital operations based on internet of things, or IoT, technology.

The company plans to complete the consolidation by the end of fiscal 2021. It is planning to invest 1 trillion yen in IT areas.

Hitachi also sees energy as a key sector, spending over 1 trillion yen on the acquisition in July 2020 of Swiss heavy machinery maker ABB’s power grid business.

Meanwhile, Hitachi is working to sell operations that have small synergies with its digital business. In 2020, the company sold Hitachi Chemical Co., now Showa Denko Materials Co., to major Japanese chemical maker Showa Denko K.K.

Hitachi is in talks with a US investment fund and others to sell Hitachi Metals Ltd. and Hitachi Construction Machinery Co.

JIJI Press

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