Innovation

Hitachi buys digital engineering services firm GlobalLogic for $9.6b

Hitachi's acquisition of GlobalLogic is part of broader plans to shift its focus towards digital services.

Written by Aimee Chanthadavong, Contributor March 31, 2021 at 5:00 p.m. PT

Hitachi has announced that it will buy US-based digital engineering services company GlobalLogic for $9.6 billion under global expansion plans for its IoT digital services business Lumada.

The acquisition is part of the Japanese conglomerate's broader plan to shift its focus from hardware to digital services.

The company said the acquisition will enable the company to focus on key focus areas such as IT, energy, industry, and mobility, while also allowing it to speed up digital transformation efforts for rail, energy, and healthcare.

GlobalLogic operates design studios and software product engineering centres in 14 countries, with revenue expected to reach about $1.2 billion for fiscal 2021. It will operate as a wholly-owned subsidiary of Hitachi once the deal is finalised.

"The acquisition of GlobalLogic creates an exciting new opportunity for Hitachi to expand our offerings of Lumada solutions and services, provide values to customers in their digital transformation journey, and grow our Lumada business globally," Hitachi president and CEO Toshiaki Higashihara said.

"The synergy of GlobalLogic's leading experience design and innovation with Hitachi's expertise in IT, operational technology, and products, will help us realise our goal to be the leading digital transformation innovator in social infrastructure worldwide.

"Together, we will create new social, environmental, economic value for our globally expanding client companies and elevate QoL (quality of life) for people through contributions to realise sustainable society."

The deal is scheduled to be finalised at the end of July, subject to regulatory approval.

The impact the deal will have on Hitachi's fiscal year ending 31 March 2022 is still being determined, the company said.

Since the start of last year, Hitachi Vantara and Hitachi Consulting have been operating as a combined organisation under the Hitachi Vantara brand. The move was part of the company's plans to globally expand and make "aggressive investments" in its Lumada-based solutions and digital capabilities.