Hitachi To Make $12B Acquisition Of US IOT Company
Hitachi who has been making headway in the premium appliance market in Australia is set to make a $12 billion dollar acquisition of a US software Company so that they can be a player in the ‘Internet of Things’ market worldwide.
The move comes only weeks after the Japanese Company cut a $393M deal with Turkey’s leading appliance maker Arcelik who has taken control of the Hitachi appliance brand outside of Japan.
Overnight the Company confirmed that they are set to acquire U.S. software developer GlobalLogic for $12 billion in what is expected to be the largest acquisition by a Japanese electrical equipment company.
“The objective of this acquisition is to advance our [Internet of Things platform] Lumada and accelerate global businesses,” Hitachi President and CEO Toshiaki Higashihara said at an online press conference on Wednesday.
The planned acquisition comes as Hitachi is rapidly overhauling its group businesses to concentrate on the IT sector while shedding non-core operations.
In Australia Tempo is set to drop the Hitachi appliance brand replacing it with Sharp TV’s.
Hitachi senior vice president Toshiaki Tokunaga said the Japanese company would benefit from GlobalLogic’s strengths in the “chip-to-cloud” know-how, as well its experience of working with companies outside Japan in sectors such as automobiles, health care and industry.
Addressing the hefty price tag of the acquisition, Higashihara said Hitachi “spent a lot of time looking into the company” and made its decision based on the organic growth potential of GlobalLogic, as well as the expected synergies with Hitachi’s IoT businesses.
GlobalLogic serves 400 U.S. companies, including telecommunication group Sprint, as well as international players such as automaker Volvo. Hitachi is hoping the acquisition will help it expand sales of its systems to these companies. GlobalLogic has more than 20,000 employees in 14 countries, along with a development base in India.
As part of its restructuring, Hitachi has also been selling non-core businesses such as appliances and TV’s.