Finmeccanica agrees to sell rail units to Hitachi

Reuters Updated - January 24, 2018 at 07:04 PM.

The headquarters of Italian defence and aerospace company Finmeccanica is seen in. Hitachi Ltd has agreed to buy Italian conglomerate Finmeccanica's rail and signal assets. File Photo

Italian defence group Finmeccanica has agreed to sell its rail and signalling units to Japan's Hitachi in a deal it says will help it to cut net debt this year by 600 million euros ($680 million) and focus on its core business.

The two companies said in a joint statement on Tuesday that Hitachi would pay 773 million euros for a 40 percent stake Finmeccanica owns in signalling unit Ansaldo STS.

Hitachi will pay Finmeccanica 9.65 euros for each Ansaldo STS share and launch a mandatory tender offer to buy all the remaining shares. The price represents a 9.2 percent premium to the stock's closing level on Monday.

Hitachi will also pay 36 million euros for Finmeccanica's loss-making AnsaldoBreda train business.

Finmeccanica said it expects to reap a 250 million euro net capital gain from the deal.

For Hitachi, which relocated its rail division to London last year, the main focus of the deal is Ansaldo STS, a profitable business that would help it to sell combined carriage and signals packages as well as giving it a manufacturing presence in continental Europe.

Published on February 24, 2015 07:36