Hitachi will likely buy 2 Italian rail units

Hitachi Ltd. will likely acquire the two rail subsidiaries of Italian aerospace and defence giant Finmeccanica for about ¥250 billion (S$2.85 billion), with a view to promoting export of the railway business, The Yomiuri Shimbun learned Monday.

Through the proposed acquisitions of the rail car and the world's second largest rail signal units, Hitachi is expected to expand the sales of its whole railway business by about 150 per cent to about ¥400 billion on an annual basis.

The company plans to exploit foreign market opportunities as a comprehensive railway firm that offers rail car, railway traffic control system and rail signal.

The combined sales of the two Finmeccanica units are about ¥240 billion on an annual basis.

Finmeccanica is to announce as early as Tuesday that it will give Hitachi preferential negotiating rights, sources said.