Hitachi Ltd will buy U.S. software company GlobalLogic Inc for $9.6 billion, including repayment of debt, as the Japanese industrial conglomerate pivots from electronics hardware to digital services, the firm said on Wednesday.
According to Refinitiv data, the deal is the biggest Japanese outbound acquisition of a US hi-tech company on record, .
The acquisition is part of Hitachi’s ongoing business portfolio overhaul, which includes the $7 billion acquisition of ABB Ltd’s power grid business last year and a series of divestitures of its domestic hardware subsidiaries.
Hitachi’s stock tumbled 7 percent on the Tokyo Stock Exchange, its sharpest daily fall in more than a year, on the news.
Founded in 2000, GlobalLogic has more than 20,000 employees in 14 countries and offers software engineering services to 400 active clients in industries including automotive, healthcare, and finance.
GlobalLogic’s expertise stretches from chips to cloud services and will extend the range of Hitachi’s own digital services business, company executives told a news conference.
Hitachi aims to close the transaction, which will be funded with cash and bank loans, by the end of July.
The conglomerate is in talks with private equity firms to sell Hitachi Metals Ltd, a deal that could fetch more than $6.4 billion, following the sale of its chemical unit and diagnostic imaging business.