Hitachi Rail Finalizes Thales GTS Acquisition
Written by William C. Vantuono, Editor-in-Chief
Hitachi Digital Communications and Control Center
Hitachi Rail on May 31 completed its $1.8 billion acquisition of Thales’ Ground Transportation Systems (GTS) business, expanding its global presence to 51 countries with the majority of its revenues now coming from “higher return signaling and systems.” Post-closing Fiscal Year 2023 combined annual revenues of $7.9 billion are projected. With addition of Thales technology, Hitachi Rail systems (which include those of such predecessor companies as Union Switch & Signal and Ansaldo STS) are deployed on more than 16,000 miles of main line railway and 2,800 miles of urban rail transit around the world.
Acquisition of Thales GTS “enhances the company’s full portfolio of transport solutions with expertise in rolling stock, urban turnkey railways, main line digital signaling, freight signaling, and communication and supervision systems,” the company said. “Hitachi Rail’s key locations in Japan, Italy, the U.K. and the U.S. are strategically complemented by GTS’ large centers in Germany, France, Spain and Canada, with both businesses having an established reputation in the wider European market, the Middle East and Asia-Pacific.”
Hitachi Rail added that the transaction almost doubles its engineering capability and “increases investment in innovation to provide an enhanced digital product offer, spanning signaling, ticketing, operations and cybersecurity solutions.“ The company has established a new “Agile Innovation” team and will combine GTS’ five global Digital Hubs & Competence Centers in Toronto, Manchester (U.K.), Paris, Berlin and Singapore with Hitachi’s Group companies. The new business is also “poised to achieve greater cost competitiveness, including improving the effectiveness of procurement, optimizing engineering capabilities and investment in R&D.”
Some 9,000 Thales employees take Hitachi Rail to 24,000 employees worldwide The company will almost double its North American footprint with 2,500 people across the U.S. and Canada, including increasing from 200 to 1,000 the former Thales GTS Global Digital Competence Centre for Urban Rail Signaling in Toronto, which is responsible for more than 100 metro lines in more than 40 cities worldwide, “significantly strengthening the Canadian business unit’s export potential as the cross-selling opportunities will enhanced.”
“In Canada, Thales invented Communications Based Train Control (CBTC) technology, and today continuous innovations are embedded in the product evolution,” Hitachi Rail Director External Affairs Adam Love told Railway Age. “Thales developed the first driverless CBTC in the world for the Expo Line in Vancouver in 1985. For more than 40 years, it has delivered state-of-the-art train control technology for the SkyTrain system, building a long-standing partnership to support the future transit of metro in Vancouver. We’ve provided 20 years of reliable service for Millennium Line in Vancouver.”
Under a pre-Thales-acquisition, 30-year RSSOM (rolling stock, systems, operations and maintenance) contract, Hitachi Rail is delivering the new, 9.7-mile C$9 billion Ontario Line in Toronto to Infrastructure Ontario and Metrolinx as leader of the Connect 6ix consortium. “The Ontario Line’s fully autonomous trains, capable of delivering trains to the platform as frequently as every 90 seconds, will travel at speeds upwards of 50 mph and be powered entirely by electricity, as well as being fitted with the latest CBTC technology,” Love noted.
As well, for the 11-mile, C$500 million Hazel McCallion (formerly called Hurontario) LRT project linking Brampton and Mississauga in Ontarion, Hitachi Rail’s scope, with its partners, includes turkey delivery of vehicles with system supply and long-term maintenance. The LRT is expected to begin service in 2025.
The acquisition, Hitachi Rail said, “marks a major step in our parent company, Hitachi Ltd.’s, long-running strategy to transform its businesses around the concept of ‘Social Innovation.’ The Group has led a strategic program to reshape its portfolio of companies around essential sectors delivering the infrastructure and technology that underpins the progress of sustainable societies. It focuses Hitachi Ltd. companies on the key industries at the crossroads of the major trends shaping today’s world: the energy transition, the digital and AI revolution, and the sustainable mobility transition.”
“Hitachi continues its transformation to become a global leader in Social Innovation Business and is undergoing a mode change to achieve growth under the Mid-term Management Plan 2024,“ said Hitachi President and CEO Keiji Kojima. “Acquisition of the Thales GTS business represents a significant milestone, and we are pleased to have achieved it in the final year of the plan. By welcoming new Hitachi Rail colleagues, Hitachi’s railway systems business has strengthened its presence in the global market. Hitachi will enhance its digital services by leveraging IT, OT and products on an expanded installed base in the mobility arena, and solve global social problems through co-creation with customers. Through this acquisition and Hitachi’s overall growth, we will continue to support our customers’ digital and green transformations and contribute to the realization of a sustainable society.”
