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Hitachi Announces Plans To Acquire GlobalLogic For $9.6B

Japanese conglomerate Hitachi has announced an agreement to purchase GlobalLogic, a U.S. based software development company. The deal is valued at $9.6 billion and will be the largest in the history of Japan’s electronics industry if it goes through.

Hitachi shares traded 7% lower following the announcement, perhaps due to investor qualms about the size of the purchase. Hitachi’s leadership, however, believes the price tag is justified by expected synergies with Hitachi’s developing digital services and IoT businesses.

GlobalLogic has worked on some high-profile projects, including a customer app and in-store digital ordering system for McDonald’s and a fingerprint recognition system for Qualcomm.

The move comes at a time when Hitachi has been moving away from hardware and towards software as it focuses on staying relevant in the 21st century. When Hitachi went public in 1959, it was most well-known as an air-conditioning manufacturer.

As the company has evolved to keep up with the times, it has divested much of its domestic hardware subsidiaries, which more planned (including Hitachi Metals, for an estimated value of $6.4 million). While the deal is certainly pricey, it’s also in alignment with Hitachi’s plan to evolve by moving into the software and digital services space.


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